Petitioners Brief — Federal Communications Commission, et al., Petitioners v. Consumers' Research, et al.

Supreme Court briefJan 8, 2025

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Nos. 24-354 and 24-422

In the Supreme Court of the United States

FEDERAL COMMUNICATIONS COMMISSION, ET AL.,

PETITIONERS

CONSUMERS’ RESEARCH, ET AL.

SCHOOLS, HEALTH & LIBRARIES BROADBAND

COALITION, ET AL., PETITIONERS

CONSUMERS’ RESEARCH, ET AL.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

BRIEF FOR THE FEDERAL PETITIONERS

P. MICHELE ELLISON

General Counsel

JACOB M. LEWIS

Deputy General Counsel

JAMES M. CARR

MATTHEW J. DUNNE

Counsel

Federal Communications

Commission

Washington, DC 20554

ELIZABETH B. PRELOGAR

Solicitor General

Counsel of Record

BRIAN M. BOYNTON

Principal Deputy Assistant

Attorney General

MALCOLM L. STEWART

Deputy Solicitor General

VIVEK SURI

Assistant to the Solicitor

General

MARK B. STERN

GERARD J. SINZDAK

Attorneys

Department of Justice

Washington, D.C. 20530-0001

SupremeCtBriefs@usdoj.gov

(202) 514-2217

QUESTIONS PRESENTED

In 47 U.S.C. 254, Congress required the Federal

Communications Commission (Commission) to operate

universal service subsidy programs using mandatory

contributions from telecommunications carriers. The

Commission has appointed a private company as the

programs’ Administrator, authorizing that company to

perform administrative tasks such as sending out bills,

collecting contributions, and disbursing funds to beneficiaries. The questions presented are as follows:

1. Whether this case is moot in light of the challengers’ failure to seek preliminary relief before the Fifth

Circuit.

2. Whether Congress violated the nondelegation

doctrine by authorizing the Commission to determine,

within the limits set forth in Section 254, the amount

that providers must contribute to the Fund.

3. Whether the Commission violated the nondelegation doctrine by using the Administrator’s financial projections in computing universal service contribution

rates.

4. Whether the combination of Congress’s conferral

of authority on the Commission and the Commission’s

delegation of administrative responsibilities to the Administrator violates the nondelegation doctrine.

(I)

TABLE OF CONTENTS

Page

Opinions below .............................................................................. 1

Jurisdiction .................................................................................... 1

Statutory provisions involved ...................................................... 2

Statement:

A. Universal Service Fund .................................................. 2

B. Proceedings below ........................................................... 7

Summary of argument ............................................................... 10

Argument..................................................................................... 13

I. This case is not moot ..................................................... 14

II. Neither Congress nor the FCC has effected an

unconstitutional delegation of power ........................... 18

A. Section 254 does not delegate legislative power

to the Commission ................................................... 18

1. Congress may confer discretionary power

upon an agency if the governing statute

provides an intelligible principle to guide

the agency’s exercise of that power ............ 19

2. Section 254 provides intelligible principles to guide the FCC in administering

the Universal Service Fund ........................ 24

3. The court of appeals understated the

extent to which the Act guides and

constrains the FCC ...................................... 31

4. The court of appeals erred in subjecting

Section 254 to a heightened nondelegation standard ................................................ 34

B. The Commission has not delegated governmental power to the Administrator .................. 38

1. The Constitution permits the government

to rely on non-binding advice provided by

private actors ............................................... 38

2. The Administrator lawfully provides

non-binding advice to the Commission ....... 41

(III)

Table of Contents—Continued:

Page

3. The court of appeals’ contrary reasoning

lacks merit.................................................... 44

C. The court of appeals’ “combination” theory is

wrong .................................................................. 48

Conclusion ................................................................................... 50

Appendix — Statutory and regulatory provisions ................ 1a

TABLE OF AUTHORITIES

Cases:

A.L.A. Schechter Poultry Corp. v. United States,

295 U.S. 495 (1935)........................................................ 19, 20

AT&T, Inc. v. FCC, 886 F.3d 1236 (D.C. Cir. 2018) ............. 2

Alenco Communications, Inc. v. FCC,

201 F.3d 608 (5th Cir. 2000) ......................................... 29, 30

American Power & Light Co. v. SEC,

329 U.S. 90 (1946) ................................................... 19, 21, 24

Barr v. American Ass’n of Political Consultants,

Inc., 591 U.S. 610 (2020) ..................................................... 32

CFPB v. Community Financial Services Ass’n,

601 U.S. 416 (2024)........................................................ 23, 37

Carter v. Carter Coal Co., 298 U.S. 238 (1936) ............. 38, 39

Consumers’ Research v. FCC, 67 F.4th 773

(6th Cir. 2023), cert. denied,

144 S. Ct. 2628 (2024) ....................................... 18, 29, 31, 38

Consumers’ Research v. FCC, 88 F.4th 917

(11th Cir. 2023), cert. denied, 144 S. Ct. 2629 ............ 18, 38

Cospito v. Heckler, 742 F.2d 2 (3d Cir. 1984),

cert. denied, 471 U.S. 113 (1985) ....................................... 39

Crowell v. Benson, 285 U.S. 22 (1932) ................................. 40

Currin v. Wallace, 306 U.S. 1 (1939) ................................... 41

Department of Commerce v. New York,

588 U.S. 752 (2019)........................................................ 37, 46

Cases—Continued:

Page

Federal Energy Administration v. Algonquin SNG,

Inc., 426 U.S. 548 (1976) ..................................................... 36

Federal Power Commission v. Hope Natural Gas

Co., 320 U.S. 591 (1944) ...................................................... 21

Federal-State Joint Board on Universal Service

In re, 12 FCC Rcd 8776 (1997) .................................. 2, 3, 32

Field v. Clark, 143 U.S. 649 (1892) ...................................... 36

Free Enterprise Fund v. PCAOB,

561 U.S. 477 (2010)........................................................ 49, 50

Friends of the Earth, Inc. v. Laidlaw

Environmental Services (TOC), Inc.,

528 U.S. 167 (2000).............................................................. 17

Gibbons v. Ogden, 9 Wheat. 1 (1824) ................................... 35

Gundy v. United States, 588 U.S. 128 (2019)...................... 20

Iowa Protection & Advocacy Services v. Tanager,

Inc., 427 F.3d 541 (8th Cir. 2005) ................................ 15, 16

J.W. Hampton, Jr., & Co. v. United States,

276 U.S. 394 (1928)........................................................ 19, 36

Kingdomware Technologies, Inc. v. United States,

579 U.S. 162 (2016).............................................................. 15

Lebron v. National Railroad Passenger Corp.,

513 U.S. 374 (1995).............................................................. 41

Lichter v. United States, 334 U.S. 742 (1948) ............... 21, 33

Loper Bright Enterprises v. Raimondo,

603 U.S. 369 (2024).............................................................. 19

MOAC Mall Holdings LLC v. Transform Holdco

LLC, 598 U.S. 288 (2023).................................................... 14

Michigan v. EPA, 576 U.S. 743 (2015) ................................ 31

Mistretta v. United States, 488 U.S. 361 (1989) ................. 24

Myers v. United States, 272 U.S. 52 (1926) ........................ 46

Cases—Continued:

Page

NLRB v. Noel Canning, 573 U.S. 513 (2014) ..................... 46

National Broadcasting Co. v. United States,

319 U.S. 190 (1943)........................................................ 20, 32

Nebraska Press Ass’n v. Stuart, 427 U.S. 539 (1976) ........ 16

New York Central Securities Corp. v.

United States, 287 U.S. 12 (1932) ...................................... 20

New York City Employees’ Retirement System v.

Dole Food Co., 969 F.2d 1430 (2d Cir. 1992) .................... 15

Newdow v. Roberts,

603 F.3d 1002 (D.C. Cir. 2010), cert. denied,

563 U.S. 1001 (2011)...................................................... 15, 16

Oklahoma v. United States,

62 F.4th 221 (6th Cir. 2023), cert. denied,

144 S. Ct. 2679 (2024) ......................................................... 39

Opp Cotton Mills, Inc. v. Administrator,

312 U.S. 126 (1941).............................................................. 21

Panama Refining Co. v. Ryan,

293 U.S. 388 (1935).................................................. 19, 20, 24

Pensacola Telegraph, Co. v. Western Union

Telegraph Co., 96 U.S 1 (1878) .......................................... 35

Pierce County v. Guillen, 537 U.S. 129 (2003) ................... 35

Public Citizen v. United States Department of

Justice, 491 U.S. 440 (1989) ............................................... 40

Qwest Corp. v. FCC, 258 F.3d 1191 (10th Cir. 2001) .... 31, 34

R.H. Johnson & Co. v. SEC,

198 F.2d 690 (2d Cir.), cert. denied,

344 U.S. 855 (1952).............................................................. 39

Roe v. Wade, 410 U.S. 113 (1973), overruled on other

grounds by Dobbs v. Jackson Women’s Health

Organization, 597 U.S. 215 (2022) .................................... 15

Rural Cellular Ass’n v. FCC:

588 F.3d 1095 (D.C. Cir. 2009) ....................................... 30

685 F.3d 1083 (D.C. Cir. 2012) ....................................... 18

VII

Cases—Continued:

Page

SEC v. Sloan, 436 U.S. 103 (1978) ....................................... 15

Skinner v. Mid-America Pipeline Co.,

490 U.S. 212 (1989)........................................................ 35, 36

Sorrell v. SEC, 679 F.2d 1323 (9th Cir. 1982) ..................... 40

Southern Pacific Terminal Co. v. ICC,

219 U.S. 498 (1911).............................................................. 15

Stern v. Marshall, 564 U.S. 462 (2011) ................................ 40

Sunshine Anthracite Coal Co. v. Adkins,

310 U.S. 381 (1940).................................................. 39, 45, 49

Texas Office of Public Utility Counsel v. FCC,

183 F.3d 393 (5th Cir. 1999) ............................................... 34

The Pittston Co. v. United States, 368 F.3d 385

(4th Cir. 2004), cert. denied, 544 U.S. 904 (2005)............. 39

Todd & Co. v. SEC, 557 F.2d 1008 (3d Cir. 1977) ............... 39

TransUnion LLC v. Ramirez, 594 U.S. 413 (2021) ........... 16

Union Bridge Co. v. United States,

204 U.S. 364 (1907).............................................................. 20

United States v. Arthrex, Inc., 594 U.S. 1 (2021) ............... 45

United States v. Frame,

885 F.2d 1119 (3d Cir. 1989), cert. denied,

493 U.S. 1094 (1990)............................................................ 39

United States v. Grimaud, 220 U.S. 506 (1911) ................. 21

United States v. Raddatz, 447 U.S. 667 (1980) ................... 40

United States v. Rock Royal Co-operative, Inc.,

307 U.S. 533 (1939)........................................................ 20, 41

United States v. Sanchez-Gomez,

584 U.S. 381 (2018)........................................................ 14, 15

United States v. Sineneng-Smith,

590 U.S. 371 (2020).............................................................. 47

University of Texas v. Camenisch,

451 U.S. 390 (1981).............................................................. 17

VIII

Cases—Continued:

Page

Vermont Agency of Natural Resources v.

United States ex rel. Stevens, 529 U.S. 765 (2000) .......... 41

Walmsley v. FTC,

117 F.4th 1032 (8th Cir. 2024), petition for cert.

pending, No. 24-420 (filed Oct. 10, 2024) .......................... 40

Wayman v. Southard, 10 Wheat. 1 (1825) .................... 19, 24

Whitman v. American Trucking Ass’ns,

531 U.S. 457 (2001)................................. 20, 21, 24, 29, 30, 33

Yakus v. United States, 321 U.S. 414 (1944) ................. 21, 38

Constitution, statutes, and regulations:

U.S. Const.:

Art. I ..................................................................... 12, 19, 20

§ 1 ................................................................................ 19

§ 2, Cl. 3 ...................................................................... 35

§ 7, Cl. 1 ...................................................................... 36

§ 8:

Cl. 1........................................................................ 36

Cl. 3........................................................................ 34

§ 9, Cl. 7 (Appropriations Clause) ...................... 36, 37

Art. II ......................................................................... 40, 45

§ 3 ................................................................................ 46

Art. III .................................................................. 12, 17, 30

§ 1 ................................................................................ 40

Amends. V-VII ................................................................ 41

Act of Apr. 10, 1790, ch. 7, § 1, 1 Stat. 109-110 ................... 22

Act of July 22, 1790, ch. 33, § 1, 1 Stat. 137 ......................... 21

Act of Aug. 4, 1790, ch. 34, § 2, 1 Stat. 139 .......................... 22

Act of Aug. 12, 1790, ch. 47, § 2, 1 Stat. 186 ........................ 22

Act of Mar. 3, 1791, ch. 15, § 43, 1 Stat. 209 ........................ 22

Act of Mar. 3, 1791, ch. 15, § 58, 1 Stat. 213 ........................ 22

Statutes and regulations—Continued:

Page

Act of Feb. 20, 1792, ch. 7, § 3, 1 Stat. 234 .......................... 22

Act of June 4, 1794, ch. 41, § 1, 1 Stat. 372 .......................... 22

Act of Mar. 3, 1797, ch. 18, § 2, 1 Stat. 509 .......................... 22

Act of July 9, 1798, ch. 70, 1 Stat. 580:

§ 3, 1 Stat. 584 .................................................................. 23

§ 4, 1 Stat. 584 .................................................................. 23

§ 22, 1 Stat. 589 ................................................................ 23

Act of Feb. 25, 1799, ch. 12, § 6, 3 Stat. 620-621 ................. 23

Communications Act of 1934, ch. 652, 48 Stat. 1064

(47 U.S.C. 151 et seq.) ........................................................... 2

47 U.S.C. 151 ...................................................................... 2

47 U.S.C. 154(i) ................................................................ 48

47 U.S.C. 214(e) ............................................................... 27

47 U.S.C. 214(e)(1)........................................................... 27

47 U.S.C. 214(e)(5)........................................................... 27

47 U.S.C. 254 .............. 3, 8-13, 18, 24, 26, 30, 31, 33-38, 1a

47 U.S.C. 254(a) ........................................................... 3, 1a

47 U.S.C. 254(b) ..........................................3, 11, 25, 31, 2a

47 U.S.C. 254(b)(1) ............................. 12, 25, 27-29, 33, 2a

47 U.S.C. 254(b)(1)-(6) .............................................. 25, 2a

47 U.S.C. 254(b)(2) .............................................. 25, 29, 2a

47 U.S.C. 254(b)(3) ...................................12, 26, 27, 33, 2a

47 U.S.C. 254(b)(4) .................................................... 25, 2a

47 U.S.C. 254(b)(5) .............................................. 25, 29, 3a

47 U.S.C. 254(b)(6) ...................................12, 26, 27, 33, 3a

47 U.S.C. 254(b)(7) .......................................... 4, 32, 33, 3a

47 U.S.C. 254(c) ..................................................... 4, 27, 3a

47 U.S.C. 254(c)(1) ............................................... 27, 33, 3a

47 U.S.C. 254(d) ......................................3, 4, 26, 29, 33, 4a

47 U.S.C. 254(e) ......................................3, 4, 27, 29, 33, 5a

47 U.S.C. 254(h) ........................................................... 4, 6a

Statutes and regulations—Continued:

Page

47 U.S.C. 254(h)(1) .................................................... 27, 6a

47 U.S.C. 254(h)(1)(A) ............................................... 28, 6a

47 U.S.C. 254(h)(1)(B) ......................................... 28, 29, 7a

47 U.S.C. 608 .................................................................... 32

National Industrial Recovery Act, ch. 90, 48 Stat. 195 ...... 20

Telecommunications Act of 1996,

Pub. L. No.104-104, 110 Stat. 56 ......................................... 3

5 U.S.C. 553(c)........................................................................ 40

28 U.S.C. 2073 ........................................................................ 40

28 U.S.C. 2077(b) ................................................................... 40

28 U.S.C. 2342(1) ................................................................... 14

47 C.F.R. Pt. 54:

Subpt. B:

Section 54.101......................................................... 4, 27

Subpts. D-G........................................................................ 4

Subpt. E:

Section 54.410............................................................. 42

Subpt. F:

Section 54.502(a) .......................................................... 4

Section 54.502(b) .......................................................... 4

Section 54.507............................................................. 42

Subpt. G:

Sections 54.604-54.606 ............................................... 42

Subpt. H:

Sections 54.701-54.717 ................................................. 5

Section 54.701(a) .......................................................... 5

Section 54.702(b) .......................................................... 5

Section 54.702(c) .............................................. 5, 42, 43

Section 54.703(b) .......................................................... 5

Section 54.703(c) .......................................................... 5

Section 54.709............................................. 5, 6, 42, 27a

Regulations—Continued:

Page

Section 54 .709(a) ..................................... 6, 41, 46, 27a

Section 54.709(a)(1) ........................................... 43, 27a

Section 54.709(a)(2) ................................. 6, 41, 44, 27a

Section 54.709(a)(3) .............................. 6, 7, 41-45, 28a

Section 54.711............................................................. 42

Section 54.711(a) .......................................................... 6

Section 54.712(a) .......................................................... 7

Section 54.715(c) .......................................................... 5

Subpt. I:

Sections 54.719-54.725 ................................................. 5

Section 54.719(b) ........................................................ 43

Miscellaneous:

Fed. Commc’ns Comm’n:

Changes to the Board of Directors of the

National Exchange Carrier Ass’n, Inc.,

In re, 12 FCC Rcd 18,400 (1997) ................................ 4

Connect America Fund, In re,

26 FCC Rcd 17,663 (2011)......................................... 32

Memorandum of Understanding Between the

Federal Communications Commission

and the Universal Service Administrative

Company (Oct. 17, 2024), https://www.fcc.

gov/sites/default/files/usac-mou.pdf .......................... 5

Proposed Fourth Quarter 2023 Universal

Service Contribution Factor, No. 96-45,

2023 WL 6036237 (Sept. 13, 2023) ............................ 47

Proposed Third Quarter 2023 Universal

Service Contribution Factor, No. 96-45,

2023 WL 4012359 (June 14, 2023) ............................ 47

Revised Second Quarter 2003 Universal

Service Contribution Factor,

18 FCC Rcd 5097 (2003)............................................ 47

XII

Miscellaneous—Continued:

Page

Universal Service Contribution Methodology,

In re, 31 FCC Rcd 13,220 (2016) .............................. 47

Julian Davis Mortenson & Nicholas Bagley,

Delegation at the Founding,

121 Colum. L. Rev. 277 (2021) ........................................... 21

Nicholas R. Parrillo, A Critical Assessment of

the Originalist Case Against Administrative

Regulatory Power, 130 Yale L.J. 1288 (2021) .................. 23

2 Joseph Story, Commentaries on the

Constitution of the United States (1833).......................... 35

Universal Serv. Admin. Co., Amended and

Restated By-Laws of Universal Service

Administrative Company (rev. Jan. 26, 2024),

https://www.usac.org/wp-content/uploads/

about/documents/leadership/usacbylaws.pdf .................... 4

In the Supreme Court of the United States

No. 24-354

FEDERAL COMMUNICATIONS COMMISSION, ET AL.,

PETITIONERS

CONSUMERS’ RESEARCH, ET AL.

No. 24-422

SCHOOLS, HEALTH & LIBRARIES BROADBAND

COALITION, ET AL., PETITIONERS

CONSUMERS’ RESEARCH, ET AL.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

BRIEF FOR THE FEDERAL PETITIONERS

OPINIONS BELOW

The opinion of the en banc court of appeals (Pet. App.

1a-124a) is reported at 109 F.4th 743. The opinion of the

court of appeals panel (Pet. App. 125a-140a) is reported

at 63 F.4th 441.

JURISDICTION

The judgment of the en banc court of appeals was entered on July 24, 2024. The petitions for writs of certi(1)

orari were filed on September 30, 2024, and October 11,

2024, and were granted on November 22, 2024. The jurisdiction of this Court rests on 28 U.S.C. 1254(1).

STATUTORY PROVISIONS INVOLVED

Pertinent statutory provisions are reproduced in the

appendix. App., infra, 1a-30a.

STATEMENT

A. Universal Service Fund

1. The Communications Act of 1934 (Communications Act or Act), ch. 652, 48 Stat. 1064 (47 U.S.C. 151

et seq.), establishes the Federal Communications Commission (FCC or Commission) and empowers it to regulate communications services. One of the FCC’s core

missions is to “make available, so far as possible, to all

the people of the United States, * * * a rapid, efficient,

Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable

charges.” 47 U.S.C. 151. That objective—i.e., ensuring

the availability of affordable and reliable communications services throughout the United States—is known

as universal service. See AT&T, Inc. v. FCC, 886 F.3d

1236, 1241 (D.C. Cir. 2018).

Until the 1990s, the FCC and state regulators promoted universal service primarily through a system of

implicit subsidies. See In re Federal-State Joint Board

on Universal Service, 12 FCC Rcd 8776, 8784 (1997).

For example, it generally cost telephone companies

more money to build networks and provide service in

rural areas than to do so in cities, creating the risk that

prohibitively high rates would prevent some rural customers from receiving telephone service. See ibid. To

address that risk, telephone companies were required

to charge below-cost rates in rural areas, but were al-

lowed to charge above-cost rates in cities. See ibid.

Through that approach, urban customers implicitly subsidized the provision of telephone service to rural customers. See ibid.

2. In 1996, Congress overhauled the Act in order to

promote competition and eliminate monopolies in the

telecommunications industry. See Telecommunications

Act of 1996, Pub. L. No. 104-104, 110 Stat. 56. As part

of those reforms, Congress created a new framework

for achieving universal service, replacing the old system

of implicit subsidies with a new system of explicit subsidies. See 47 U.S.C. 254.

The amended Act directs the FCC to establish a set

of programs known collectively as the Universal Service

Fund (Fund). See 47 U.S.C. 254(a). Carriers that provide interstate telecommunications services must “contribute” to the Fund in accordance with the statute and

FCC regulations. 47 U.S.C. 254(d). The Commission

must use the money in the Fund to subsidize universal

service. See 47 U.S.C. 254(e).

The Act specifies six “principles” that guide and limit

the FCC’s exercise of that authority. 47 U.S.C. 254(b).

It provides that (1) services should be available at “just,

reasonable, and affordable rates”; (2) “all regions of the

Nation” should have access to services; (3) customers

throughout the Nation should have access to services

that are “reasonably comparable” in quality and price

to those provided in urban areas; (4) carriers should

make “equitable and nondiscriminatory” contributions

to universal service; (5) universal service subsidies

should be “specific, predictable[,] and sufficient”; and

(6) “schools,” “libraries,” and “health care providers”

should have access to services. 47 U.S.C. 254(b)(1)-(6).

The Commission may adopt additional principles if the

Commission and the Federal-State Joint Board on Universal Service (Joint Board) determine that doing so is

“necessary and appropriate for the protection of the

public interest, convenience, and necessity and are consistent with” the Act. 47 U.S.C. 254(b)(7).

The Act guides and limits the collection and spending

of universal service contributions in additional ways.

For example, the Act specifies the entities that must

pay contributions, see 47 U.S.C. 254(d); the entities that

may receive subsidies, see 47 U.S.C. 254(e) and (h); and

the types of services that the Fund may subsidize, see

47 U.S.C. 254(c).

In accordance with the Act, the FCC has established

four universal service programs, which assist (1) rural,

insular, and high-cost areas; (2) low-income customers;

(3) schools and libraries; and (4) rural healthcare providers. See 47 C.F.R. Pt. 54, Subpts. D-G. All four programs subsidize telephone and high-speed internet services, see 47 C.F.R. 54.101, and the program for schools

and libraries subsidizes internal connections as well, see

47 C.F.R. 54.502(a) and (b).

3. In 1997, the FCC directed that the Universal Service Administrative Company (USAC or Company) be

established to help the Commission administer the Fund.

See In re Changes to the Board of Directors of the National Exchange Carrier Ass’n, Inc., 12 FCC Rcd

18,400, 18,418-18,419 (1997). USAC is a private, not-forprofit corporation chartered in Delaware. See Pet. App.

59a.

USAC is subject to the FCC’s oversight and control.

Its sole stockholder, an association of carriers, must

“act in compliance with the [FCC’s] Rules and Orders

when exercising its stockholder duties and powers.”

Amended and Restated By-Laws of Universal Service

Administrative Company, Art. I, ¶ 1 (rev. Jan. 26,

2024). FCC rules identify the groups represented on

the Company’s Board of Directors—e.g., carriers, program beneficiaries, and state regulators—and the FCC

Chair selects directors after reviewing nominations

from those groups. See 47 C.F.R. 54.703(b) and (c). The

Company also must obtain the Commission’s approval

of its budget. See 47 C.F.R. 54.715(c).

The FCC has “appointed” USAC as the Fund’s “permanent Administrator.” 47 C.F.R. 54.701(a). The Administrator provides financial projections that the Commission uses in computing the amounts of universal service contributions. See 47 C.F.R. 54.709. The Administrator also sends out bills and collects contributions.

See 47 C.F.R. 54.702(b). Finally, the Administrator disburses money to program beneficiaries in accordance

with FCC rules. See ibid.

Although the Administrator performs administrative tasks on the FCC’s behalf, it exercises no independent regulatory power. The Administrator “may not

make policy, interpret unclear provisions of the statute

or rules, or interpret the intent of Congress.” 47 C.F.R.

54.702(c). It must comply with the Commission’s rules,

see 47 C.F.R. 54.701-54.717, and with “orders, written

directives, and other instructions promulgated by the

Commission or its bureaus and offices,” Memorandum

of Understanding Between the Federal Communications Commission and the Universal Service Administrative Company 2 (Oct. 17, 2024). Any party that is

aggrieved by the Administrator’s decisions may request

de novo review by the Commission. See 47 C.F.R.

54.719-54.725.

4. The FCC’s regulations prescribe a process for

computing each carrier’s quarterly contribution to the

Fund. See 47 C.F.R. 54.709. In general, that process

involves projecting the Fund’s expenses, calculating the

carriers’ revenues, and computing contributions based

on the ratio of the projected expenses to the revenues.

See 47 C.F.R. 54.709(a).

At least 60 days before the start of the quarter, the

Administrator must submit to the FCC its projections

of the expenses (benefits plus administrative overhead)

that the universal service programs will incur. See 47

C.F.R. 54.709(a)(3). The Administrator must also inform the FCC of “the basis for those projections,” enabling the Commission and its staff to review (and, if necessary, revise) the projections. Ibid. The projections

“must be approved by the Commission before they are

used” to calculate contributions. Ibid.

The FCC’s rules separately require carriers to file

quarterly forms projecting their revenues from interstate and international telecommunications services for

the upcoming quarter. See 47 C.F.R. 54.711(a). The

Administrator must then calculate the “total contribution base”—i.e., carriers’ total projected revenues—by

aggregating the information provided by individual carriers. 47 C.F.R. 709(a)(3). It must report the total contribution base to the Commission at least 30 days before

the start of the quarter. See ibid.

The FCC then computes a “contribution factor”—

i.e., a number based on the ratio of the projected expenses to the total revenues. See 47 C.F.R. 54.709(a)(2).

It announces the projections and contribution factor in

a public notice and on its website. See 47 C.F.R.

54.709(a)(3). The Commission reserves the right, at any

time during the ensuing 14 days, to revise the projections (and thus the contribution factor) and to set them

“at amounts that the Commission determines will serve

the public interest.” Ibid. If the Commission takes no

action within 14 days, the projections and contribution

factor are “deemed approved.” Ibid.

Once the FCC approves the contribution factor, the

Administrator calculates each carrier’s contribution by

applying the factor to the carrier’s interstate and international telecommunications revenues. See 47 C.F.R.

54.709(a)(3). For example, if the contribution factor is

25%, each carrier would owe 25% of its interstate and

international telecommunications revenues. Carriers

may pass the cost of contributions on to customers. See

47 C.F.R. 54.712(a).

B. Proceedings Below

1. In November 2021, the Administrator submitted

its projections of program expenses for the first quarter

of 2022. See J.A. 1-82. In December 2021, it submitted

its calculation of the total contribution base for that

quarter. See Pet. App. 150a-159a. Based on those projections, the FCC proposed a contribution factor of

25.2%. See id. at 141a-149a.

Respondents—a nonprofit organization, a carrier,

and a group of consumers—filed comments requesting

that the FCC set the contribution factor at 0% instead.

See Gov’t C.A. Br. 17. Respondents did not object to

the Administrator’s projections or to the Commission’s

computation of the contribution factor based on those

projections. They instead argued that the Universal

Service Fund was itself unlawful because Congress had

unconstitutionally delegated legislative power to the

FCC and the Commission had unconstitutionally redelegated power to the Administrator. See Pet. App. 11a.

The FCC took no further action within 14 days after

publishing the proposed contribution factor, and the

factor therefore was deemed approved. See Pet. App.

11a.

2. Respondents filed a petition for review in the

Fifth Circuit. See Pet. App. 11a. Multiple groups of

Universal Service Fund beneficiaries intervened in support of the government. See C.A. Doc. 516199644 (Feb.

11, 2022); C.A. Doc. 516199667 (Feb. 11, 2022); C.A. Doc.

516180110 (Jan. 26, 2022). A unanimous panel denied

the petition for review. See Pet. App. 125a-140a.

The panel held that Section 254 does not unconstitutionally delegate legislative power to the FCC. See Pet.

App. 132a-137a. It determined that Section 254 sets

forth “numerous intelligible principles” that constrain

the Commission’s exercise of its authority. Id. at 137a.

The panel also rejected respondents’ claim that the

FCC had unconstitutionally delegated governmental

power to the Administrator. See id. at 137a-140a. The

panel emphasized that the Administrator lacks independent regulatory authority and functions “subordinate[ly]” to the Commission. Id. at 140a.

3. The court of appeals granted respondents’ petition for rehearing en banc. See Pet. App. 160a-161a. By

a vote of 9-7, the en banc court subsequently granted

respondents’ petition for review. See id. at 1a-124a.

The en banc court noted that respondents’ challenge

to the specific FCC action at issue—the contribution

factor for the first quarter of 2022—“might be moot”

because sovereign immunity might preclude recovery of

money already paid into the Universal Service Fund.

Pet. App. 13a. The court held, however, that the case

“is nonetheless justiciable because it is capable of repetition yet evading review.” Ibid.

On the merits, the en banc court stated that “Congress through [Section] 254 may have delegated legis-

lative power to FCC because it purported to confer

upon FCC the power to tax without supplying an intelligible principle to guide FCC’s discretion.” Pet. App.

19a. The court characterized Section 254’s limits on the

Commission’s authority as “minimal,” “contentless,” “a

hollow shell,” and “so amorphous that no reviewing

court could ever possibly invalidate any FCC action.”

Id. at 27a, 29a, 41a. The court found those nondelegation concerns to be “especially salient” because Section

254 “implicates the taxing power”—a “quintessentially

legislative” power. Id. at 19a, 41a n.13.

The en banc court then stated that the FCC “may

have impermissibly delegated the taxing power to private entities.” Pet. App. 19a. The court concluded that

the Administrator’s projections could “take legal effect

without formal FCC approval.” Id. at 49a. The court

also expressed the view that, as a practical matter, the

Commission “ ‘rubber stamp[s]’ whatever contribution

amount [the Administrator] proposes.” Id. at 50a (citation omitted). Finally, the court stated that Section 254

does not authorize the Commission to delegate power to

the Administrator in the first place. See id. at 55a.

Although the en banc court was “highly skeptical” of

the constitutionality of Congress’s grant of power to the

FCC, and of the FCC’s vesting of administrative responsibilities in the Administrator, the court did not decide whether either conferral of authority standing

alone would violate the Constitution. See Pet. App. 64a.

The court instead held that “the combination of Congress’s sweeping delegation to FCC and FCC’s unauthorized subdelegation to [the Administrator] violates

the Legislative Vesting Clause.” Ibid. In the court’s

view, the “double-layered delegation” at issue in this

case constituted “a historical anomaly” and undermined

“democratic accountability.” Id. at 73a-74a.

Judge Elrod, joined by two other judges, issued a

concurring opinion in which she concluded that “Congress’s delegation of legislative power to the FCC and

the FCC’s delegation of the taxing power to a private

entity each individually contravene[s] the separation of

powers.” Pet. App. 82a. Judge Ho issued a concurring

opinion in which he emphasized that “all legislative powers” are “exercised by the people we elect.” Id. at 85a.

Judge Stewart, joined by six judges, dissented. See

Pet. App. 88a-114a. He reasoned that Section 254

“evinces a clear intelligible principle delimiting agency

discretion”; that the en banc court of appeals’ analysis

reflected an “exaggerated conception of [the Administrator’s] role and discretion”; and that “delegations of

the taxing power are not subject to stricter scrutiny.”

Id. at 97a, 103a-104a. Judge Higginson, joined by four

judges, also dissented. See id. at 115a-124a. He criticized the en banc court’s “ ‘combination’ theory” as inconsistent with this Court’s precedents. Id. at 116a.

4. This Court granted petitions for writs of certiorari filed by the government and by the intervenors.

See 2024 WL 4864036 (Nov. 22, 2024). The Court directed the parties to brief the following question, in addition to those presented by the petitions: “Whether

this case is moot in light of the challengers’ failure to

seek preliminary relief before the Fifth Circuit.” Ibid.

SUMMARY OF ARGUMENT

I. This case is not moot. Because the FCC sets a

new contribution factor each quarter, and because a

quarter is too short a period for a challenge to the factor

to be fully litigated, this case fits within the “capable of

repetition, yet evading review” exception to mootness.

Respondents’ failure to seek preliminary relief does

not affect that conclusion. The capable-of-repetition exception focuses on the nature of the suit, not on the conduct of the parties, and this Court has applied the exception even when litigants have failed to move for preliminary relief. Treating a motion for preliminary relief

as a prerequisite for applying the exception would needlessly encourage parties to litigate, and courts to address, complex legal claims in haste.

II. The court of appeals erred in holding that the

universal service contribution system violates the nondelegation doctrine.

A. Section 254 does not effect an impermissible delegation of legislative power to the FCC. Although Congress may not delegate legislative power to executive

agencies, Congress may authorize an agency to exercise

discretion in implementing a statute. A statute effects

a lawful grant of discretion, rather than an unlawful delegation of legislative power, if it supplies an intelligible

principle to guide the agency—that is, if it defines the

general policy that the agency must pursue and the

boundaries of the agency’s power.

That test is not demanding. Applying it, this Court

has upheld statutes that authorize agencies to regulate

in the “public interest,” to fix “just and reasonable”

prices, and to identify and recover “excessive profits.”

Those decisions are consistent with the Constitution’s

original meaning, as evidenced by early Congresses’ enactment of statutes granting broad discretion to the Executive Branch.

Section 254 satisfies that constitutional test. By directing the agency to base universal service policies on

six enumerated “principles,” 47 U.S.C. 254(b), the statute defines the general policy that the FCC must pur-

sue. The Commission must ensure, for example, that

services are available at “affordable” rates; that “rural”

consumers have access to services that are “reasonably

comparable” to services available in “urban areas”; and

that “schools” and “libraries” have access to services.

47 U.S.C. 254(b)(1), (3), and (6).

Section 254 also defines the boundaries of the FCC’s

authority. The statute specifies who must pay universal

service contributions, the terms on which they must do

so, the purposes for which the funds must be used, the

types of services that the Commission must subsidize,

and the types of entities that may receive funding. The

statute provides further guidance concerning the scope

of the individual programs—for instance, by specifying

how the subsidy provided to rural health care providers

should be calculated. Section 254’s detailed guidance

far exceeds what this Court’s precedents require.

B. The FCC did not subdelegate legislative power

to the private Administrator. Just as Article I prohibits

Congress from delegating legislative power to executive

agencies, it also prohibits Congress from delegating

such power to private persons. When exercising executive power, however, an agency may properly solicit and

rely on private advice. This Court and courts of appeals

have upheld statutes under which private entities propose, and government agencies decide whether to

adopt, regulations. This Court has similarly explained

that an Article III court does not delegate judicial

power by relying on a non-binding recommendation

from a non-Article III adjunct, such as a magistrate

judge or special master.

Within the limits set by Congress, the FCC determines the amount of money that carriers must contribute to the Universal Service Fund. The Administrator

simply gives the FCC advice—namely, projections of

the universal service programs’ expenses and the carriers’ revenues for the upcoming quarter, calculated according to FCC rules. Those projections do not bind the

Commission. The Commission may review and adjust

the projections before using them to calculate the contribution factor, and it reserves the right to revise the

projections during the 14-day period after it announces

the factor. Because the Commission rather than the

Administrator makes the ultimate decision, the Administrator’s advisory role does not violate the nondelegation doctrine.

C. The combination of Congress’s grant of discretion to the FCC and the FCC’s conferral of responsibility upon the Administrator does not violate the nondelegation doctrine. Because Section 254 supplies an intelligible principle, it effects a grant of executive power.

That executive power does not become legislative power

simply because the Commission, in carrying out its universal service responsibilities, considers advice provided by the Administrator.

ARGUMENT

Universal service has been an essential component

of federal telecommunications policy since Congress established the FCC in 1934. For more than a quarter

century, Congress and the Commission have sought to

promote that policy through the Universal Service Fund.

The subsidies provided by the Fund have made telephone service affordable for rural and low-income consumers, have supported the provision of essential rural

health care services, and have facilitated internet access

in schools and libraries.

In the decision below, the en banc Fifth Circuit held

that the universal service contribution system violates

the nondelegation doctrine. That decision conflicts with

decades of precedent and centuries of practice; reflects

a misreading of the Communications Act and the FCC’s

rules; and threatens to nullify the universal service programs, to the detriment of the millions of Americans

whom those programs serve. This Court should reverse

the court of appeals’ judgment.

I. THIS CASE IS NOT MOOT

A. In general, a case is moot if “it is impossible for a

court to grant any effectual relief.” MOAC Mall Holdings LLC v. Transform Holdco LLC, 598 U.S. 288, 295

(2023) (citation omitted). In this case, the court of appeals found that at least one of the entities that had petitioned for review “had Article III standing when the

petition was filed,” since as of the filing date “vacatur of

the FCC’s approval of the proposed contribution factor

would have prevented collection of ” the entity’s quarterly contribution. Pet. App. 12a. At the present time,

however, a court can no longer redress the specific FCC

action—the contribution factor for the first quarter of

2022—that is the immediate subject of respondents’

challenge. Because that quarter has ended, prospective

relief is no longer feasible. And because the applicable

judicial-review statute does not waive the government’s

immunity from damages claims, see 28 U.S.C. 2342(1),

a court may not order the government to repay universal service contributions that were collected during that

quarter.

This suit nonetheless remains justiciable because the

dispute is “capable of repetition, yet evading review.”

See United States v. Sanchez-Gomez, 584 U.S. 381, 391

(2018). That exception to the mootness doctrine applies

if “(1) the challenged action is in its duration too short

to be fully litigated prior to its cessation or expiration,

and (2) there is a reasonable expectation that the same

complaining party will be subjected to the same action

again.” Ibid. (citation omitted). This case satisfies the

first requirement because the quarterly contribution

factor is effective for only one quarter. See Kingdomware Technologies, Inc. v. United States, 579 U.S. 162,

170 (2016) (explaining that “a period of two years” is often “too short to complete judicial review”). And the

case satisfies the second requirement because the FCC

calculates a new contribution factor every quarter. See

Southern Pacific Terminal Co. v. ICC, 219 U.S. 498, 515

(1911) (applying the capable-of-repetition exception to

a challenge to an agency’s repeated “short term orders”).

B. Some courts of appeals have held that a party

may invoke the capable-of-repetition exception only if it

has moved for preliminary relief. See, e.g., New York

City Employees’ Retirement System v. Dole Food Co.,

969 F.2d 1430, 1435 (2d Cir. 1992); Iowa Protection &

Advocacy Services v. Tanager, Inc., 427 F.3d 541, 544

(8th Cir. 2005); Newdow v. Roberts, 603 F.3d 1002, 1009

(D.C. Cir. 2010), cert. denied, 563 U.S. 1001 (2011). Those

decisions are incorrect.

This Court has never held or suggested that a party

must seek preliminary relief in order to invoke the

capable-of-repetition exception. To the contrary, the

Court has applied the exception even in cases where the

complaining party does not appear to have sought such

relief. See, e.g., Kingdomware, 579 U.S. at 169-170;

SEC v. Sloan, 436 U.S. 103, 108-109 (1978); Roe v. Wade,

410 U.S. 113, 125 (1973), overruled on other grounds by

Dobbs v. Jackson Women’s Health Organization, 597

U.S. 215 (2022). And in identifying the criteria that govern this exception, the Court has consistently articu-

lated the two-part test described above without alluding

to the presence or absence of a request for preliminary

relief.

Some courts of appeals have concluded that a dispute

does not “evade review” if the complaining party could

have sought preliminary relief that would delay a challenged action’s occurrence, thereby preventing the

complainant’s challenge from becoming moot. See, e.g.,

Iowa Protection & Advocacy Services, 427 F.3d at 544

(“Where prompt application for a stay pending appeal

can preserve an issue for appeal, the issue is not one

that will evade review.”) (citation omitted). Those courts

have held that, in order to invoke the capable-of-repetition

exception, a party must “make a full attempt to prevent

his case from becoming moot, an obligation that includes filing for preliminary injunctions.” Newdow, 603

F.3d at 1009. Those courts appear to view a complainant’s failure to seek preliminary relief as a lack of due

diligence that should disentitle the complainant to the

potential benefits of the exception. That reasoning is

unsound.

First, the case-or-controversy requirement and the

capable-of-repetition exception concern the nature of

the dispute between the parties rather than their conduct of the litigation. See, e.g., TransUnion LLC v.

Ramirez, 594 U.S. 413, 424 (2021) (explaining that the

case-or-controversy requirement limits federal courts

to matters “of a Judiciary Nature”) (citation omitted);

Nebraska Press Ass’n v. Stuart, 427 U.S. 539, 547 (1976)

(explaining that the capable-of-repetition exception applies to disputes that are “by nature short-lived”). The

capable-of-repetition exception reflects this Court’s

recognition that a justiciable controversy between adverse parties sometimes may continue to exist even

when the specific action that originally prompted the

suit has been completed and cannot be undone. See,

e.g., Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167, 190-192 (2000);

id. at 213-214 (Scalia, J., dissenting). A party’s decision

whether to seek interim relief at an earlier stage of a

case has no logical bearing on whether a justiciable Article III controversy continues to exist after a particular

challenged action has run its course.

Second, a court’s decision whether to grant a request

for preliminary relief is neither a decision on the merits

nor a step towards a decision on the merits. Although

the availability of preliminary relief turns in part on the

perceived likelihood that the moving party will ultimately prevail, a judicial stay or preliminary injunction

simply determines the parties’ respective rights and obligations during the pendency of the litigation. See, e.g.,

University of Texas v. Camenisch, 451 U.S. 390, 395

(1981) (“The purpose of a preliminary injunction is

merely to preserve the relative positions of the parties

until a trial on the merits can be held.”). By declining

to seek preliminary relief, a complainant accepts the

prospect that the challenged action of the defendant

may remain in effect pending the court’s resolution of

the merits. A complainant’s decision to accept that consequence does not, however, manifest a lack of diligence

in prosecuting the suit.

C. As this case illustrates, requiring parties to seek

preliminary relief in order to invoke the capable-ofrepetition exception would make little practical sense.

If respondents had sought preliminary relief, the parties and the court of appeals might have been forced to

brief and address complex constitutional questions in

haste—within just a single quarter. If the court had

granted a preliminary injunction preventing the collection of universal service contributions, its ruling would

have seriously disrupted the administration of a major

national program. Dismissing this case as moot because

of respondents’ decision not to seek preliminary relief

would invite those disruptive consequences in the next

suit challenging universal service contributions, and in

analogous suits challenging other types of recurring

agency action. This Court should clarify that a request

for preliminary relief is not necessary to invoke the

capable-of-repetition exception and should go on to resolve the merits of this case.

II. NEITHER CONGRESS NOR THE FCC HAS EFFECTED

AN UNCONSTITUTIONAL DELEGATION OF POWER

The court of appeals erred in concluding that “the

combination” of Congress’s grant of power to the FCC

and the FCC’s reliance on the advice provided by the

Administrator violates the Constitution. Pet. App. 19a.

Section 254 does not delegate legislative power to the

Commission. The Commission did not subdelegate power

to the Administrator. And the combination of those two

conferrals of responsibility does not violate the Constitution.

A. Section 254 Does Not Delegate Legislative Power To

The Commission

The Fifth Circuit stated that Congress “may have

delegated legislative power” in enacting Section 254.

Pet. App. 19a. But as three other courts of appeals have

held, Section 254 does not effect any such delegation.

See Consumers’ Research v. FCC, 67 F.4th 773, 787-795

(6th Cir. 2023), cert. denied, 144 S. Ct. 2628 (2024); Consumers’ Research v. FCC, 88 F.4th 917, 923-924 (11th

Cir. 2023), cert. denied, 144 S. Ct. 2629 (2024); Rural

Cellular Ass’n v. FCC, 685 F.3d 1083, 1091 (D.C. Cir.

2012).

1. Congress may confer discretionary power upon an

agency if the governing statute provides an intelligible principle to guide the agency’s exercise of that

power

a. Article I provides that “[a]ll legislative Powers

herein granted shall be vested in a Congress of the

United States.” U.S. Const. Art. I, § 1. Congress may

not delegate those powers to the other branches of the

government. See A.L.A. Schechter Poultry Corp. v.

United States, 295 U.S. 495, 529 (1935); Panama Refining Co. v. Ryan, 293 U.S. 388, 421 (1935). Congress

may, however, seek “assistance from another branch.”

J.W. Hampton, Jr., & Co. v. United States, 276 U.S. 394,

406 (1928). In particular, it may authorize executive

agencies to exercise “discretion” in implementing and

enforcing the laws that Congress enacts. Ibid.; see, e.g.,

Loper Bright Enterprises v. Raimondo, 603 U.S. 369,

394 (2024) (“In a case involving an agency, of course, the

statute’s meaning may well be that the agency is authorized to exercise a degree of discretion.”); Wayman v.

Southard, 10 Wheat. 1, 46 (1825) (Marshall, C.J.) (“[T]he

maker of the law may commit something to the discretion of the other departments.”).

If a statute sets forth an “intelligible principle” to

guide an executive agency’s actions, it effects a lawful

grant of discretion rather than an unlawful delegation

of legislative power. J.W. Hampton, 276 U.S. at 409. A

statute satisfies that requirement if it defines both “the

general policy” that the agency must pursue and “the

boundaries of th[e] delegated authority.” American

Power & Light Co. v. SEC, 329 U.S. 90, 105 (1946). That

test is “not demanding.” Gundy v. United States, 588

U.S. 128, 146 (2019) (plurality opinion).

Only twice in the country’s history has this Court

held that a statute effected an unconstitutional delegation of legislative power to the Executive Branch. See

Schechter Poultry, 295 U.S. at 529-542; Panama Refining, 293 U.S. at 414-420. Both cases involved the National Industrial Recovery Act, ch. 90, 48 Stat. 195,

which Congress had enacted during the depths of the

Great Depression. The provision at issue in one of those

cases authorized the President to “regulate the entire

economy on the basis of no more precise a standard than

stimulating the economy by assuring ‘fair competition.’ ” Whitman v. American Trucking Ass’ns, 531

U.S. 457, 474 (2001); see Schechter Poultry, 295 U.S. at

529-542. The provision in the other case supplied “literally no guidance for the exercise of discretion.” American Trucking, 531 U.S. at 474; see Panama Refining,

293 U.S. at 414-420.

By contrast, this Court has repeatedly upheld broad

statutory grants of discretion to executive agencies.

For example, it has upheld laws that authorize agencies

to:

•

Regulate in the “public interest.” See National

Broadcasting Co. v. United States, 319 U.S. 190,

225-226 (1943) (NBC) (broadcast licensing);

United States v. Rock Royal Co-operative, Inc.,

307 U.S. 533, 576-577 (1939) (milk prices); New

York Central Securities Corp. v. United States,

287 U.S. 12, 24-25 (1932) (railroad acquisitions).

•

Prohibit “unreasonable” obstructions to the free

navigation of navigable waters. See Union Bridge

Co. v. United States, 204 U.S. 364, 387 (1907).

•

Raise the minimum wage “as rapidly as economically feasible without substantially curtailing employment.” See Opp Cotton Mills, Inc. v. Administrator, 312 U.S. 126, 142-146 (1941).

•

Set “just and reasonable” rates for natural gas.

See Federal Power Commission v. Hope Natural

Gas Co., 320 U.S. 591, 600 (1944).

•

Set “fair and equitable” commodity prices. See

Yakus v. United States, 321 U.S. 414, 420-427

(1944).

•

Prohibit corporate structures that “unfairly or inequitably distribute voting power among security

holders” in holding companies. See American

Power & Light, 329 U.S. at 104-106.

•

Determine and recover “excessive profits” from

military contractors. See Lichter v. United

States, 334 U.S. 742, 774-787 (1948).

•

Set air-quality standards that are “requisite to

protect the public health.” See American Trucking, 531 U.S. at 472-476.

b. This Court’s nondelegation jurisprudence accords

with the Constitution’s original meaning. Since “the beginning of the Government,” Congress has enacted “general provisions” that confer substantial policymaking

discretion upon the Executive Branch. United States v.

Grimaud, 220 U.S. 506, 517 (1911); see Julian Davis

Mortenson & Nicholas Bagley, Delegation at the

Founding, 121 Colum. L. Rev. 277, 332-366 (2021).

The First Congress repeatedly granted broad discretionary powers to the President. It authorized the

President to adopt “rules and regulations” to govern

“trade and intercourse with the Indian tribes,” Act of

July 22, 1790, ch. 33, § 1, 1 Stat. 137; to restructure the

country’s foreign debt “for the interest of the [United]

States,” Act of Aug. 4, 1790, ch. 34, § 2, 1 Stat. 139; and

to fix “reasonable and proper” salaries for revenue officers, Act of Mar. 3, 1791, ch. 15, § 58, 1 Stat. 213.

The First Congress also granted broad discretionary

powers to other executive officers. It empowered the

Secretary of the Treasury to establish “reasonable”

terms and conditions for returning property seized by

revenue officers, Act of Mar. 3, 1791, ch. 15, § 43, 1 Stat.

209; empowered the Patent Board to decide which inventions were “sufficiently useful and important” to

warrant patents, Act of Apr. 10, 1790, ch. 7, § 1, 1 Stat.

109-110; and empowered the Sinking Fund Commission

to pay off the national debt under “such regulations as

shall appear to them best calculated to fulfill the intent

of this act,” Act of Aug. 12, 1790, ch. 47, § 2, 1 Stat. 186.

Subsequent Congresses enacted similar provisions.

The Second Congress authorized the Postmaster General to provide for the carrying of the mail “as he may

judge most expedient” and to prescribe such postal regulations “as may be found necessary.” Act of Feb. 20,

1792, ch. 7, § 3, 1 Stat. 234. The Third Congress authorized the President to lay embargoes “whenever, in his

opinion, the public safety shall so require”; to impose

such embargo regulations “as the circumstances of the

case may require”; and to extend or revoke an embargo

“whenever he shall think proper.” Act of June 4, 1794,

ch. 41, § 1, 1 Stat. 372. The Fourth Congress empowered the Secretary of the Treasury to refund a “just and

reasonable” portion of a license fee in cases of “peculiar

hardship.” Act of Mar. 3, 1797, ch. 18, § 2, 1 Stat. 509.

And the Fifth Congress provided that, “in case of the

prevalence of a contagious or epidemical disease at the

seat of government,” the President could relocate the

government “to such other place or places as, in his discretion, shall be deemed most safe and convenient for

conducting the public business.” Act of Feb. 25, 1799,

ch. 12, § 6, 3 Stat. 620-621.

Particularly salient here, early Congresses vested

Executive Branch officials with substantial discretion

even when implementing tax legislation. See Nicholas

R. Parrillo, A Critical Assessment of the Originalist

Case Against Administrative Regulatory Power, 130

Yale L.J. 1288, 1318-1345 (2021). In 1798, Congress imposed a direct tax on real estate and established a federal board of tax commissioners in each State to implement the tax. See Act of July 9, 1798, ch. 70, §§ 3, 4, 1

Stat. 584. Congress authorized each board to divide the

State into districts and to increase or decrease all the

property valuations in any district, en masse, by any

percentage that “shall appear to be just and equitable.”

§ 22, 1 Stat. 589. The boards were thereby empowered

to determine the geographic distribution of the burden

of the real-estate tax across each State’s regions. See

Parrillo 1391-1392. The federal board in Maryland, for

example, increased all valuations in Baltimore by 100%,

shifting much of the tax burden to the State’s “mercantile elite.” Id. at 1408. The federal board in Pennsylvania, meanwhile, reduced all valuations in Allegheny

County by 50%, seemingly because the county had been

“the cradle of the Whiskey Rebellion” a few years earlier. Id. at 1342.

The practices of the First Congress and of other

early Congresses provide “contemporaneous and weighty

evidence of the Constitution’s meaning.” CFPB v. Community Financial Services Ass’n, 601 U.S. 416, 432

(2024) (citation omitted). Here, early practice confirms

that Congress possesses substantial leeway in conferring discretionary powers upon the Executive Branch.

c. This Court’s nondelegation precedents also reflect the practical reality that constitutional limits on

delegation are not “readily enforceable by the courts.”

Mistretta v. United States, 488 U.S. 361, 415 (1989)

(Scalia, J., dissenting). “A certain degree of discretion

* * * inheres in most executive * * * action.” American Trucking, 531 U.S. at 475 (brackets and citation

omitted). And legislation must often address “complex

conditions involving a host of details with which the national legislature cannot deal directly.” Panama Refining, 293 U.S. at 421.

“Once it is conceded, as it must be,” that “some judgments, even some judgments involving policy considerations, must be left to the officers executing the law,”

“the debate over unconstitutional delegation becomes a

debate not over a point of principle but over a question

of degree.” Mistretta, 488 U.S. at 415 (Scalia, J., dissenting). The “precise boundary” between a lawful

grant of discretion and an unlawful delegation of power

“is a subject of delicate and difficult inquiry”; the “line

has not been exactly drawn.” Wayman, 10 Wheat. at

43, 46. This Court accordingly has “almost never felt

qualified to second-guess Congress regarding the permissible degree of policy judgment that can be left to

those executing or applying the law.” American Trucking, 531 U.S. at 474-475 (citation omitted).

2. Section 254 provides intelligible principles to guide

the FCC in administering the Universal Service

Fund

Section 254 defines both “the general policy” that the

FCC must pursue and “the boundaries of this delegated

authority.” American Power & Light, 329 U.S. at 105.

a. A statutory provision captioned “Universal service principles” states that “the Commission shall base

policies for the preservation and advancement of universal service” on six specific “principles.” 47 U.S.C.

254(b). Those principles are:

•

“Quality services should be available at just, reasonable, and affordable rates.”

47 U.S.C.

254(b)(1).

•

“Access to advanced telecommunications and information services should be provided in all regions of the Nation.” 47 U.S.C. 254(b)(2).

•

“Consumers in all regions of the Nation, including

low-income consumers and those in rural, insular,

and high cost areas, should have access to telecommunications and information services, including interexchange services and advanced telecommunications and information services, that are

reasonably comparable to those services provided

in urban areas and that are available at rates that

are reasonably comparable to the rates charged

for similar services in urban areas.” 47 U.S.C.

254(b)(3).

•

“All providers of telecommunications services

should make an equitable and nondiscriminatory

contribution to the preservation and advancement

of universal service.” 47 U.S.C. 254(b)(4).

•

“There should be specific, predictable[,] and sufficient Federal and State mechanisms to preserve

and advance universal service.”

47 U.S.C.

254(b)(5).

•

“Elementary and secondary schools and classrooms, health care providers, and libraries should

have access to advanced telecommunications services as described in subsection (h).” 47 U.S.C.

254(b)(6).

Those principles provide substantial guidance about

the policy that the FCC must pursue. The Commission

must ensure that telecommunications services are

“of decent quality and reasonably priced,” “available

broadly across all regions,” “equally available in rural

and urban areas,” and “established in important public

spaces (schools, healthcare providers, and libraries).”

Pet. App. 133a (panel opinion). The Commission must

achieve those goals through “state and federal mechanisms” and must obtain funding “in an equitable and

nondiscriminatory manner.” Ibid.

b. Section 254 also delineates the boundaries of the

FCC’s authority. In the universal service principles

listed above and in other provisions, the statute specifies “from whom funds are exacted,” “who receives the

benefit of the funds,” “what minimum standards of service must be provided,” and much else besides. Pet.

App. 93a (Stewart, J., dissenting).

The Act specifies the entities that must pay universal

service contributions and the terms on which they must

do so. “Every telecommunications carrier that provides

interstate telecommunications services shall contribute” toward universal service. 47 U.S.C. 254(d). Carriers must contribute “on an equitable and nondiscriminatory basis.” Ibid. The FCC may exempt a particular

carrier only if its activities are so limited that its contribution “would be de minimis.” Ibid.

The Act also identifies the purposes for which the

FCC must use contributions. The statute instructs the

Commission to assist “rural, insular, and high cost areas”; “low-income consumers”; “schools” and “librar-

ies”; and “health care providers for rural areas.” 47

U.S.C. 254(b)(3), (6), and (h)(1); see 47 U.S.C. 254(b)(6)

(cross-referencing Section 254(h)). The agency has established a universal service program for each of those

groups. See p. 4, supra.

The Act likewise specifies the types of services that

the FCC may fund. See 47 U.S.C. 254(c). Generally,

the Commission may fund only “telecommunications

services.” 47 U.S.C. 254(c)(1). In deciding which services to fund, the Commission must consider the extent

to which the services (1) “are essential to education,

public health, or public safety”; (2) “have, through the

operation of market choices by customers, been subscribed to by a substantial majority of residential customers”; (3) “are being deployed in public telecommunications networks by telecommunications carriers”;

and (4) “are consistent with the public interest, convenience, and necessity.” Ibid. Applying those factors, the

Commission has decided to fund telephone and highspeed internet services. See 47 C.F.R. 54.101.

Finally, the Act specifies which carriers may receive

subsidies and how the subsidies may be used. See 47

U.S.C. 214(e), 254(e). To be eligible to receive funds,

a carrier must offer its services and advertise their

availability “throughout the service area.” 47 U.S.C.

214(e)(1); see 47 U.S.C. 214(e)(5) (defining “service

area”). A carrier may use funds “only for the provision,

maintenance, and upgrading of facilities and services

for which the support is intended.” 47 U.S.C. 254(e).

c. In addition to delineating the boundaries of the

universal service programs generally, the Act specifies

the scope of the individual programs. One of the Act’s

universal service principles states that rural and lowincome consumers should have “access” to services that

are “reasonably comparable to those services provided

in urban areas,” at rates that are “reasonably comparable to rates charged for similar services in urban areas.”

47 U.S.C. 254(b)(3). The Act accordingly does not grant

the FCC unfettered power to subsidize rural and lowincome consumers as much (or as little) as it wishes, but

instead instructs the agency to use services and rates in

urban areas as a benchmark.

The Act provides even more detailed instructions

about funding for rural health care providers. It states

that, if a “public or nonprofit” rural health care provider

seeks telecommunications services that are “necessary

for the provision of health care services,” a carrier must

provide those telecommunications services “at rates

that are reasonably comparable to rates charged for

similar services in urban areas in that State.” 47 U.S.C.

254(h)(1)(A). The carrier may then recoup, from the

Universal Service Fund, “the difference” between the

rural rate that it would normally charge and the urban

rate that the Act requires it to charge. Ibid.

The Act likewise provides detailed instructions about

funding for schools and libraries. If a school or library

requests telecommunications services “for educational

purposes,” a carrier must provide those services “at

rates less than the amounts charged for similar services

to other parties.” 47 U.S.C. 254(h)(1)(B). “The discount

shall be an amount that the Commission * * * and the

States * * * determine is appropriate and necessary to

ensure affordable access to and use of such services.”

Ibid. The carrier may then recoup the amount of the

discount from the Universal Service Fund. See ibid.

d. In the decision below, the court of appeals focused

on the FCC’s discretion to determine “how much”

money the universal service programs collect and pay

out. Pet. App. 26a. But the Act meaningfully constrains

that aspect of the Commission’s discretion as well.

As discussed above, the Act provides significant

guidance about the nature and scope of the universal

service programs. The FCC must follow that guidance

in setting the amount of the subsidies. For example, in

setting funding levels for rural areas, the Commission

must seek to ensure that rural services and rates are “reasonably comparable” to urban ones. 47 U.S.C. 254(b)(3).

The Commission could not provide extra funding to

make services in rural areas better or cheaper than

those in urban areas. So too, in deciding how much

funding to provide for schools and libraries, the agency

must determine the discount that would be “appropriate and necessary to ensure affordable access to and use

of such services.” 47 U.S.C. 254(h)(1)(B). The agency

could not provide a higher subsidy simply because it

prefers the services to be free, rather than merely “affordable.” Ibid.

The Act also provides that universal service funding

“should be” “sufficient to achieve the purposes of this

section.” 47 U.S.C. 254(e); see 47 U.S.C. 254(b)(5) (“sufficient Federal and State mechanisms to preserve and

advance universal service”); 47 U.S.C. 254(d) (“sufficient mechanisms established by the Commission to

preserve and advance universal service”). That language limits the “size and budget” of the universal service programs, “allowing growth no larger than what is

‘sufficient to achieve the purposes’ of universal service.”

Consumers’ Research, 67 F.4th at 794 (quoting 47

U.S.C. 254(e)); see Alenco Communications, Inc. v.

FCC, 201 F.3d 608, 620 (5th Cir. 2000) (“[E]xcessive

funding may itself violate the sufficiency requirements

of the Act.”); cf. American Trucking, 531 U.S. at 475-

476 (construing the statutory term “requisite” to mean

“not lower or higher than is necessary”).

Finally, one of the universal service principles states

that services should be available at “affordable rates.”

47 U.S.C. 254(b)(1). That principle, too, limits the size

of the universal service programs. “Because universal

service is funded by a general pool subsidized by all telecommunications providers—and thus indirectly by the

customers—excess subsidization in some cases may detract from universal service by causing rates unnecessarily to rise, thereby pricing some consumers out of the

market.” Alenco, 201 F.3d at 620. The affordability

principle instructs the FCC to ensure that the universal

service contribution does not become “so large as to risk

making basic telephone services unaffordable.” Rural

Cellular Ass’n v. FCC, 588 F.3d 1095, 1108 (D.C. Cir.

2009).

e. The Act easily satisfies the intelligible-principle

test. The Act provides far more detailed guidance than

many other statutes that this Court has upheld or that

early Congresses enacted. See pp. 20-23, supra. If

Congress may authorize an executive agency to regulate in the “public interest,” to set “just and reasonable”

rates, or to decide which inventions are “sufficiently

useful and important” to warrant patents, it may authorize the FCC to administer the Universal Service

Fund within the framework discussed above.

The Act also bears no resemblance to the National

Industrial Recovery Act provisions that the Court has

previously held invalid under the nondelegation doctrine. Whereas the provision in Schechter Poultry “conferred authority to regulate the entire economy,” American Trucking, 531 U.S. at 474, Section 254 confers authority to collect payments from a specific set of entities

to fund a defined set of services. And while the provision in Panama Refining “provided literally no guidance for the exercise of discretion,” ibid., Section 254

provides “comprehensive and substantial guidance and

limitations on how to implement Congress’s universalservice policy,” Consumers’ Research, 67 F.4th at 791.

3. The court of appeals understated the extent to which

the Act guides and constrains the FCC

The court of appeals asserted that Section 254 provides the FCC with “ ‘no guidance whatsoever,’ ” and

that the Commission may use universal service contributions “to fund whatever projects it might like.” Pet.

App. 27a-28a, 30a (citation and emphasis omitted). The

court’s stated bases for that conclusion lack merit.

a. The court of appeals concluded that, because the

universal service principles specify what the FCC

“should” do, 47 U.S.C. 254(b), they are purely “aspirational,” Pet. App. 28a. That is incorrect. The Act states

that the FCC “shall base policies * * * on the [listed]

principles.” 47 U.S.C. 254(b). The word “shall” imposes

a “mandatory duty”: The Commission “must base its

policies on the principles.” Qwest Corp. v. FCC, 258

F.3d 1191, 1200 (10th Cir. 2001).

Congress’s use of the word “should” in articulating

the individual principles allows the Commission to “balance the principles against one another when they conflict.” Qwest, 258 F.3d at 1200. But the Commission “may

not depart from [the principles] altogether to achieve

some other goal.” Ibid. Consistent with the nondelegation doctrine, Congress often directs agencies to make

tradeoffs or to balance competing interests. See, e.g.,

Michigan v. EPA, 576 U.S. 743, 752-753 (2015).

b. The court of appeals also emphasized that the

FCC may supplement the enumerated universal service

principles. See Pet. App. 28a-29a; 47 U.S.C. 254(b)(7). *

But that authority is itself constrained by an intelligible

principle: The FCC may add a new principle only if the

Commission and the Joint Board determine that doing

so is “necessary and appropriate for the protection of

the public interest, convenience, and necessity” and is

“consistent with” the Act. Ibid. This Court has held

that the “public interest, convenience, and necessity”

standard, as used in the Communications Act, complies

with the nondelegation doctrine. See NBC, 319 U.S. at

225-226. The Court also has rejected nondelegation

challenges to other statutes that adopt “public interest”

standards. See p. 20, supra.

The court of appeals was also wrong to suggest that

the FCC in adding new principles may “disregard[]

[the] enumerated principles.” Pet. App. 28a. Any new

principles added by the Commission must be “consistent with” the Act. 47 U.S.C. 254(b)(7). The Commission thus may not adopt a new principle that conflicts with the six enumerated principles.

In all events, the Communications Act’s severability

clause states that, “[i]f any provision of this [Act] * * *

is held invalid, the remainder of the [Act] * * * shall

not be affected thereby.” 47 U.S.C. 608; see Barr v.

* Exercising that authority, the FCC has added two principles. In

1997, it adopted the principle that universal service funding should

be “competitively neutral,” meaning that funding should “neither

unfairly advantage nor disadvantage one provider over another, and

neither unfairly favor nor disfavor one technology over another.” In

re Federal-State Joint Board on Universal Service, 12 FCC Rcd

8776, 8801 (1997). In 2011, the FCC adopted the principle that universal service funding “should be directed where possible to networks that provide advanced services, as well as voice services.” In

re Connect America Fund, 26 FCC Rcd 17,663, 17,679 (2011) (citation omitted).

American Ass’n of Political Consultants, Inc., 591 U.S.

610, 627 (2020) (plurality opinion). If this Court concludes that Congress violated the nondelegation doctrine by authorizing the FCC to adopt new universal

service principles, the Court should sever Section

254(b)(7)’s grant of authority rather than invalidate the

whole universal service scheme.

c. Finally, the court of appeals described Section

254’s provisions as “contentless,” “a hollow shell,” and

“so amorphous that no reviewing court could ever possibly invalidate any FCC action taken in its name.” Pet.

App. 29a, 41a. Those descriptions are inapt.

Many of Section 254’s provisions impose clear limits

on the FCC’s authority. For example, the Commission

must collect contributions from “telecommunications

carrier[s].” 47 U.S.C. 254(d). It must assist “rural” areas, “low-income consumers,” “schools” and “libraries,”

and rural “health care providers.” 47 U.S.C. 254(b)(3)

and (6). And it must fund “telecommunications services.” 47 U.SC. 254(c)(1).

Other provisions of the Act—such as the directive

that universal service funding be “sufficient” to achieve

the statute’s purposes, 47 U.S.C. 254(e)—establish

qualitative standards rather than bright-line rules. But

the nondelegation doctrine does not require Congress

to adopt a “determinate criterion,” American Trucking,

531 U.S. at 475 (citation omitted), or a “specific formula,” Lichter, 334 U.S. at 785. Congress may adopt

qualitative criteria such as “just and reasonable,” “fair

and equitable,” or “public interest.” See pp. 20-21, supra.

Section 254’s grant of discretion is not so broad that

“no reviewing court could ever possibly invalidate any

FCC action” taken under that provision. Pet. App. 41a.

In fact, courts, including the Fifth Circuit, have invalidated FCC action under the statute. The Fifth Circuit

held that the Commission had exceeded its statutory

powers by limiting the States’ authority to set eligibility

criteria for carriers seeking universal service funding,

see Texas Office of Public Utility Counsel v. FCC, 183

F.3d 393, 417-418 (1999), and by requiring certain local

carriers to recover universal service contributions from

long-distance providers rather than from consumers,

see id. at 424-425. The court also determined that the

Commission had not adequately explained its decision

to define a carrier’s contribution base to include international revenues. See id. at 433-435. And the Tenth

Circuit held in another case that the Commission had

not adequately explained why a subsidy for rural areas

would provide “sufficient” funding to ensure that rural

rates were “reasonably comparable” to urban rates.

See Qwest, 258 F.3d at 1202-1203.

4. The court of appeals erred in subjecting Section 254

to a heightened nondelegation standard

a. In discussing the applicable nondelegation standard, the court of appeals found it “especially salient”

that Section 254 “implicates the taxing power.” Pet.

App. 41a n.13. While recognizing that this Court “has

declined to apply heightened scrutiny to tax-related delegations,” the court asserted that “the Constitution’s

original meaning would seem to compel a more restrictive test for delegations of the taxing power.” Ibid.

That reasoning is flawed on multiple levels.

To begin, Congress did not need to rely on its taxing

power to enact Section 254. The Constitution empowers

Congress to regulate “Commerce” “among the several

States.” U.S. Const. Art. I, § 8, Cl. 3. The commerce

power includes the authority to regulate the channels

and instrumentalities of commerce, see Pierce County

v. Guillen, 537 U.S. 129, 147 (2003), which include telecommunications networks, see Pensacola Telegraph Co.

v. Western Union Telegraph Co., 96 U.S. 1, 9 (1878).

And Congress may regulate commerce by requiring

those engaged in commerce to pay money to the government. See Gibbons v. Ogden, 9 Wheat. 1, 202 (1824)

(“[D]uties may often be, and in fact often are, imposed

on tonnage, with a view to the regulation of commerce.”); 2 Joseph Story, Commentaries on the Constitution of the United States § 1083, at 530 (1833) (“[T]he

power to regulate commerce includes the power of laying duties.”). The commerce power therefore provides

an independently sufficient basis for Section 254’s requirement that carriers pay universal service contributions.

In any event, this Court has specifically rejected “the

application of a different and stricter nondelegation

doctrine in cases where Congress delegates discretionary authority to the Executive under its taxing power.”

Skinner v. Mid-America Pipeline Co., 490 U.S. 212,

222-223 (1989). The Court in reviewing tax laws has instead applied ordinary nondelegation principles. See

id. at 218-224. “Congress may wisely choose to be more

circumspect in delegating authority under the Taxing

Clause than under other of its enumerated powers, but

this is not a heightened degree of prudence required by

the Constitution.” Id. at 223.

Contrary to the court of appeals’ suggestion, “the

Constitution’s original meaning” does not support “a

more restrictive test for delegations of the taxing

power.” Pet. App. 42a n.13. Some constitutional provisions impose special criteria for tax legislation. For example, direct taxes must be apportioned, see U.S.

Const. Art. I, § 2, Cl. 3; indirect taxes must be uniform,

see Art. I, § 8, Cl. 1; and bills to raise revenue must originate in the House of Representatives, see Art. I, § 7,

Cl. 1. But “in terms of the scope and degree of discretionary authority that Congress may delegate,” the

Constitution’s text does not distinguish the taxing

power from other enumerated powers. Mid-America,

490 U.S. at 220-221.

Nor does historical practice support the adoption of

a heightened nondelegation standard for tax laws.

“From its earliest days to the present,” Congress in enacting tax legislation “has varied the degree of specificity and the consequent degree of discretionary authority delegated to the Executive.” Mid-America, 490 U.S.

at 221. As noted above, a 1798 statute empowered executive officers to exercise broad discretion in implementing a federal real-estate tax. See p. 23, supra.

Congress also has enacted, and this Court has upheld,

multiple statutes granting the President broad authority to set or change tariffs. See Federal Energy Administration v. Algonquin SNG, Inc., 426 U.S. 548, 558-560

(1976); J.W. Hampton, 276 U.S. at 409; Field v. Clark,

143 U.S. 649, 683-689 (1892).

b. The court of appeals found Section 254 “especially

troubling because the statute insulates FCC from * * *

the appropriations power.” Pet. App. 31a. But any concerns about the appropriations power are properly evaluated under the Appropriations Clause, U.S. Const.

Art. I, § 9, Cl. 7, not under the nondelegation doctrine.

Respondents have not brought an Appropriations

Clause challenge here. See Pet. App. 32a n.10.

Section 254, in all events, does not “insulate” the

FCC from the appropriations power. In enacting Section 254, Congress instead exercised the appropriations

power by authorizing the Commission to expend the

Universal Service Fund for specified purposes. Congress retains the authority to repeal that appropriation.

The court of appeals found it significant that the Fund

operates “outside the [annual] appropriations process.”

Pet. App. 32a (emphasis omitted). But the Appropriations Clause does not require Congress to make annual

appropriations. It instead allows Congress to make

“standing appropriations,” and Congress has done so

since the beginning of the Republic. Community Financial Services Ass’n, 601 U.S. at 436; see id. at 436437. “Frequently, too, standing appropriations do not

designate specific sums of money, thus combining one

type of flexibility with another.” Id. at 444 (Kagan, J.,

concurring). No sound textual or historical basis exists

for applying a heightened nondelegation test to such appropriations.

c. Finally, the court of appeals stated that, although

Congress may direct executive agencies to apply their

“technical knowledge” in implementing statutes, it may

not empower executive agencies to make “significant

policy judgments.” Pet. App. 34a-35a. The court concluded that Section 254 grants the Commission the

power to make only “policy judgments, not technical

ones.” Id. at 35a.

The court of appeals’ rigid dichotomy between policy

judgments and technical judgments is flawed. Agency

decisionmaking is not a “rarified technocratic process,

unaffected by political considerations.” Department of

Commerce v. New York, 588 U.S. 752, 781 (2019) (citation omitted). And agency decisionmaking usually involves both making policy and applying technical expertise. For example, in implementing Section 254’s directive that services “should be available at just, rea-

sonable, and affordable rates,” 47 U.S.C. 254(b)(1), the

FCC must make policy judgments about what rates are

just, reasonable, and affordable in light of its technical

knowledge about telecommunications services.

A statute does not delegate legislative power simply

by empowering the Executive Branch to exercise policymaking discretion. This Court has repeatedly upheld

statutes that direct agencies to make policy judgments

—including statutes that empower agencies to regulate

in the public interest, to set fair and equitable prices,

and to identify and recover excessive profits. See pp.

20-21, supra. It is thus “no objection” that the statute

“call[s] for the exercise of judgment, and for the formulation of subsidiary administrative policy within the

prescribed statutory framework.” Yakus, 321 U.S. at

425-426.

B. The Commission Has Not Delegated Governmental

Power To The Administrator

The Fifth Circuit also stated that the FCC “may

have” unlawfully “subdelegat[ed]” legislative power to

the Administrator, a private corporation. Pet. App. 19a.

As two other courts of appeals have recognized, the

Commission has done no such thing. See Consumers’

Research, 67 F.4th at 795-797 (6th Cir.); Consumers’

Research, 88 F.4th at 925-928 (11th Cir.). The Administrator provides advice to the Commission, and the

government does not delegate legislative power by considering non-binding advice from private actors.

1. The Constitution permits the government to rely on

non-binding advice provided by private actors

In Carter v. Carter Coal Co., 298 U.S. 238 (1936), this

Court explained that Congress may not delegate legislative power to private actors. See id. at 310-311. The

statute at issue in that case authorized producers of

two-thirds of the coal in a district to set wages and hours

for all producers in that district, without review by any

federal agency. See id. at 281-283. The Court described

that grant of power as “legislative delegation in its most

obnoxious form; for it is not even delegation to an official.” Id. at 311.

In Sunshine Anthracite Coal Co. v. Adkins, 310 U.S.

381 (1940), however, this Court clarified that the federal

government in performing its functions may rely on private assistance, including non-binding recommendations made by private actors. The statute at issue in

that case authorized local boards consisting of private

coal producers to propose minimum prices for coal, but

empowered the National Bituminous Coal Commission,

a governmental body, to approve, disapprove, or modify

those prices. See id. at 388. The Court described that

scheme as “unquestionably valid.” Id. at 399. It emphasized that the private boards functioned “subordinately” to a government agency, that their actions were

subject to the agency’s “authority and surveillance,”

and that the agency rather than the boards ultimately

“determine[d] the prices.” Ibid. Congress has since enacted, and courts of appeals have generally upheld,

many statutes authorizing private actors to propose

regulations to federal agencies. See, e.g., R.H. Johnson

& Co. v. SEC, 198 F.2d 690, 695 (2d Cir.), cert. denied,

344 U.S. 855 (1952); United States v. Frame, 885 F.2d

1119, 1128-1129 (3d Cir. 1989), cert. denied, 493 U.S.

1094 (1990); Todd & Co. v. SEC, 557 F.2d 1008, 10121013 (3d Cir. 1977); Cospito v. Heckler, 742 F.2d 2, 8689 (3d Cir. 1984), cert. denied, 471 U.S. 1113 (1985); The

Pittston Co. v. United States, 368 F.3d 385, 394-397 (4th

Cir. 2004), cert. denied, 544 U.S. 904 (2005); Oklahoma

v. United States, 62 F.4th 221, 228-233 (6th Cir. 2023),

cert. denied, 144 S. Ct. 2679 (2024); Walmsley v. FTC,

117 F.4th 1032, 1037-1039 (8th Cir. 2024), petition for

cert. pending, No. 24-420 (filed Oct. 10, 2024); Sorrell v.

SEC, 679 F.2d 1323, 1325-1326 (9th Cir. 1982).

Indeed, the political branches routinely solicit advice

from private individuals. Members of Congress speak

to lobbyists, listen to witnesses at committee hearings,

and hold town halls with their constituents. Presidents

consult with private groups before making nominations,

see Public Citizen v. United States Department of Justice, 491 U.S. 440, 444-445 (1989), and agencies solicit

private advice when they conduct notice-and-comment

rulemaking, see 5 U.S.C. 553(c). Those practices comport with Articles I and II because the government does

not delegate its power by taking account of private advice in deciding how to exercise that power.

By the same token, Article III vests the judicial

power in federal courts, and neither Congress nor the

courts themselves may delegate that power to persons

who lack specified tenure and salary protections. See

U.S. Const. Art. III, § 1; Stern v. Marshall, 564 U.S.

462, 482-485 (2011). Yet courts may rely on the recommendations of non-Article III adjuncts, such as magistrate judges, special masters, and law clerks. Such recommendations comply with Article III because they are

“advisory,” Crowell v. Benson, 285 U.S. 22, 51 (1932),

and because the court retains the power to issue “the

ultimate decision,” United States v. Raddatz, 447 U.S.

667, 681-683 (1980). This Court likewise considers recommendations from advisory committees when issuing

the Federal Rules of Procedure and Evidence, and the

lower courts consider recommendations from advisory

committees when issuing local rules. See 28 U.S.C.

2073, 2077(b).

The nondelegation doctrine does not limit private actors to advisory roles alone. Since the Founding, private actors have participated in the implementation of

federal law in a variety of ways, including by serving on

grand and petit juries, see U.S. Const. Amends. V-VII;

bringing qui tam suits, see Vermont Agency of Natural

Resources v. United States ex rel. Stevens, 529 U.S. 765,

776-777 (2000); and buying shares in governmentchartered corporations, such as the Bank of the United

States, see Lebron v. National Railroad Passenger

Corp., 513 U.S. 374, 386-387 (1995). This Court has also

upheld statutes under which agency rules may take effect only if approved in a referendum of the regulated

parties. See Rock Royal, 307 U.S. at 577-578; Currin v.

Wallace, 306 U.S. 1, 15-16 (1939). To resolve this case,

however, the Court need not identify the full range of

functions that the government may properly confide to

private entities. For present purposes, it suffices to

hold that no delegation concerns arise when an agency

receives non-binding advice from a private body.

2. The Administrator lawfully provides non-binding

advice to the Commission

The Administrator’s role in calculating the universal

service contribution complies with the private nondelegation doctrine. Within the limits set by Congress, the

FCC determines how much carriers must pay. See 47

C.F.R. 54.709(a) (stating that the contribution factor is

“determined quarterly by the Commission”). The Administrator simply helps the Commission set the contribution factor by providing non-binding advice—namely,

projections of the programs’ expenses and the carriers’

revenues. See 47 C.F.R. 54.709(a)(2) and (3).

The Administrator must make those projections in

accordance with FCC rules. The rules establish detailed eligibility requirements for beneficiaries, see,

e.g., 47 C.F.R. 54.410; impose caps on particular types

of support, see, e.g., 47 C.F.R. 54.507; and set formulas

for calculating the amount of the subsidy, see, e.g., 47

C.F.R. 54.604-54.606. The Administrator must apply

those rules when projecting the programs’ expenses; it

may not change the projections based on its own policy

judgment that beneficiaries should receive more or less

money. See 47 C.F.R. 54.702(c), 54.709(a)(3). The rules

also require each carrier to file a form reporting its own

projected revenues for the upcoming quarter. See 47

C.F.R. 54.711. The Administrator must add up the

numbers reported by the carriers, fill in estimates for

carriers that do not submit the required forms, and report the total to the Commission. See 47 C.F.R. 54.709.

Projections of program expenses “must be approved

by the Commission before they are used to calculate the

quarterly contribution factor.” 47 C.F.R. 54.709(a)(3).

The Administrator must submit those projections and

“the basis for those projections” to the Commission and

the FCC’s Office of the Managing Director at least 60

days before the quarter begins. Ibid. That requirement

enables the Commission and its staff to review—and, if

necessary, revise—the projections before using them to

calculate the contribution factor.

The Administrator must likewise report the “total

contribution base” (i.e., the carriers’ total projected

revenues) to the FCC at least 30 days before the start

of the quarter. See 47 C.F.R. 54.709(a)(3). The FCC

may adjust that figure as well. In this case, for example,

the Administrator reported a total contribution base of

approximately $9.2 billion, see Pet. App. 158a, and the

Commission then adjusted that figure to approximately

$7.3 billion, see id. at 144a. The change reflected two

routine adjustments: one to ensure that the projected

revenues were “net of projected contributions,” 47

C.F.R. 54.709(a)(1), and the other “to account for uncollectible contributions,” Pet. App. 144a.

The FCC then uses the information provided by the

Administrator to calculate a quarterly contribution factor, which the Commission announces in a public notice

and on its website. See 47 C.F.R. 54.709(a)(3). At any

time within the ensuing 14-day period, the FCC may revise the contribution factor by setting projections “at

amounts that the Commission determines will serve the

public interest.” Ibid. Only if the Commission takes no

further action during that 14-day period is the factor

“deemed approved.” Ibid. At that point, the Administrator must “calculate the amount of individual contributions” by “apply[ing] the quarterly contribution factor” to each individual carrier’s revenues. Ibid.

Further limiting the Administrator’s role, a carrier

that is aggrieved by the Administrator’s actions may

seek de novo review before the FCC. See 47 C.F.R.

54.719(b). And the Administrator “may not make

policy, interpret unclear provisions of the statute or

rules, or interpret the intent of Congress.” 47 C.F.R.

54.702(c). If the statute or the rules “are unclear, or do

not address a particular situation, the Administrator

shall seek guidance from the Commission.” Ibid. Thus,

if the Administrator confronts an unsettled legal or policy issue in the course of making projections (or taking

any other action), it must seek guidance from the Commission rather than resolving the issue itself.

The Administrator’s projections, in short, constitute

non-binding advice. The FCC determines the manner

in which the Administrator computes those projections;

reviews and revises the projections before calculating

the contribution factor; and retains the power to make

further revisions during the 14-day period after the

Commission announces the contribution factor. The

Administrator’s advisory role complies with the nondelegation doctrine.

3. The court of appeals’ contrary reasoning lacks merit

a. The court of appeals reasoned that, although an

agency may “solicit advice” from a private person, the

agency “must affirmatively act to give legal effect to

that advice because it alone has constitutional authority

to execute [the law].” Pet. App. 49a. The court believed

that the FCC’s rules violate that principle because they

allow the Administrators’s “projections [to] take legal

effect without formal FCC approval.” Ibid. But the

court misread the applicable regulations.

Contrary to the court of appeals’ view, projections

provided by the Administrator lack independent legal

effect. Only the contribution factor has legal effect. See

47 C.F.R. 54.709(a)(3) (directing the Administrator to

calculate carriers’ contributions by “apply[ing] the

quarterly contribution factor”). That factor is “determined by the Commission,” “announced by the Commission in a public notice,” and “approved by the Commission.” 47 C.F.R. 54.709(a)(2) and (3).

As discussed above, the FCC retains the power to review and revise the projections before using them to calculate the contribution factor. See p. 42, supra. The

Administrator must submit the projections and underlying data to the Commission in advance. See 47 C.F.R.

54.709(a)(2) and (3). Projections of the programs’ expenses “must be approved by the Commission before

they are used to calculate the quarterly contribution

factor,” 47 C.F.R. 54.709(a)(3), and the Commission

may also adjust the total contribution base as it deems

appropriate, see, e.g., Pet. App. 144a.

The court of appeals emphasized the FCC rule

providing that, if the Commission takes no further action within 14 days after announcing the contribution

factor, then the factor and the underlying projections

are “deemed approved.” 47 C.F.R. 54.709(a)(3); see Pet.

App. 49a. But that provision simply gives the FCC an

additional opportunity to revise the projections. It does

not limit or displace the FCC’s authority to adjust the

projections before it announces the contribution factor.

b. The court of appeals also asserted that the FCC

“rubber stamp[s]” the Administrator’s projections, and

that the Administrator sets the contribution factor “de

facto if not de jure.” Pet. App. 7a. That claim is both

legally irrelevant and factually incorrect.

As a legal matter, the relevant question is whether

the FCC has authority to reject the Administrator’s advice, not how often the FCC exercises that power. In

Sunshine Anthracite, for example, this Court held that

a regulatory scheme complied with the nondelegation

doctrine because a federal agency had the “authority”

to approve, reject, or modify the private entities’ proposals. 310 U.S. at 399; cf. United States v. Arthrex,

Inc., 594 U.S. 1, 27 (2021) (plurality opinion) (“[A principal officer] need not review every decision of the [inferior officer]. What matters is that the [principal officer] have the discretion to review decisions rendered

by [inferior officers].”). In this case, the court of appeals did not deny that the Commission retains plenary

authority to review and revise the Administrator’s projections.

The court of appeals’ contrary approach conflicts

with basic separation-of-powers principles. Article II

vests the President with the “general administrative

control of those executing the laws,” Myers v. United

States, 272 U.S. 52, 164 (1926), and directs him to “take

Care that the Laws be faithfully executed,” U.S. Const.

Art. II, § 3. It is the President’s responsibility, not the

courts’ responsibility, to ensure that executive officers

exercise “independent judgment” and avoid “rubber

stamp[ing]” their advisers’ proposals. Pet. App. 7a, 50a.

Judicial inquiry into those matters would represent “ ‘a

substantial intrusion’ into the workings of another

branch,” and would violate the “general rule against inquiring into ‘the mental process of administrative decisionmakers.’ ” Department of Commerce, 588 U.S. at

781 (citations omitted). It would also contravene the

principle that a court should “generally take at face

value” a coordinate branch’s “own report of its actions,”

NLRB v. Noel Canning, 573 U.S. 513, 551 (2014)—here,

the FCC’s report that the Commission independently

approves the projections and determines the contribution factor, see 47 C.F.R. 54.709(a).

Even apart from those difficulties, the court of appeals identified no workable standard for determining

how much weight a government actor may properly give

to private recommendations. Taken to its logical conclusion, the court’s approach would permit litigants to

allege that members of Congress have delegated legislative power by relying too much on staffers; that the

President has delegated executive power by relying too

much on advisers; or that judges have delegated judicial

power by relying too much on law clerks. Courts lack

administrable standards for resolving such claims; no

clear line separates lawful reliance on advice from unlawful “de facto abdication.” Pet. App. 50a.

As a factual matter, moreover, the FCC does conduct

meaningful review of the Administrator’s actions. On

several occasions, including twice in 2023, the FCC has

departed from the Administrator’s projections when

calculating the quarterly contribution factor. See, e.g.,

FCC, Proposed Fourth Quarter 2023 Universal Service

Contribution Factor, No. 96-54, 2023 WL 60362377, at

*1 (Sept. 13, 2023); FCC, Proposed Third Quarter 2023

Universal Service Contribution Factor, No. 96-54, 2023

WL 4012359, at *1 (June 14, 2023); Revised Second

Quarter 2003 Universal Service Contribution Factor,

18 FCC Rcd 5097, 5097 (2003). The FCC also has

awarded relief when it has disagreed with the Administrator’s calculation of contributions owed by individual

carriers. See, e.g., In re Universal Service Contribution Methodology, 31 FCC Rcd 13,220, 13,220 (2016).

The relative infrequency with which the Commission revises the Administrator’s decisions reflects the Administrator’s limited role, the detailed rules constraining its

actions, and the Commission’s general oversight of its

activities. See Pet. App. 121a (Higginson, J., dissenting).

c. Finally, the court of appeals stated that, “[e]ven if

the Constitution does not categorically forbid FCC’s

delegation to” the Administrator, the Act “does not authorize it.” Pet. App. 55a. But respondents have raised

only a constitutional claim under the private nondelegation doctrine, not a statutory claim under the Act. See

id. at 63a n.21. The court erred by addressing a statutory challenge that respondents never raised. See

United States v. Sineneng-Smith, 590 U.S. 371, 375-376

(2020).

Regardless, the court of appeals’ statutory objection

lacks merit. The Act authorizes the FCC to “perform

any and all acts, make such rules and regulations, and

issue such orders, not inconsistent with [the Act], as

may be necessary in the execution of its functions.” 47

U.S.C. 154(i). The Act accordingly empowers the Commission to formulate an administrative process for determining the contribution factor and to seek the Administrator’s advice as part of that process.

C. The Court Of Appeals’ “Combination” Theory Is Wrong

As explained above, the court of appeals was “highly

skeptical” that the contribution factor at issue here

comports with either “the bar on congressional delegations of legislative power” or “the general rule that private entities may not wield governmental power.” Pet.

App. 64a. But the court did not definitively “resolve either question in this case.” Ibid. The court instead held

that “the combination” of Congress’s “delegation” to

the FCC and the Commission’s “subdelegation” to the

Administrator “violates the Legislative Vesting Clause.”

Ibid.

The court of appeals’ “combination” theory is flawed.

Where a statute permissibly vests an agency with executive power, that power does not somehow become legislative simply because a private entity advises the

agency on how to exercise it.

The court of appeals’ theory also conflicts with this

Court’s decision in Sunshine Anthracite. See Pet. App.

116a-117a (Higginson, J., dissenting). In that case, as

discussed above, an agency set coal prices based on proposals made by private coal producers. See p. 39, supra.

The challengers argued that the scheme violated both

the public nondelegation doctrine (by empowering the

agency to set prices) and the private nondelegation doc-

trine (by allowing private entities to play a role in the

process by which those prices were determined). See

Sunshine Anthracite, 310 U.S. at 397-399. This Court

rejected the public nondelegation challenge, explaining

that Congress had specified “wholly adequate” “criteria” to guide the agency. Id. at 398. The Court then

rejected the private nondelegation challenge, noting

that the agency, not the private entities, “determine[d]

the prices.” Id. at 399. The Court “ended its analysis

of both delegation challenges there”; it did not suggest

that the combination of the two conferrals of authority

required a further analysis beyond that needed to evaluate each challenge taken on its own. Pet. App. 116a

(Higginson, J., dissenting).

The court of appeals was wrong to assert that the

purported “double-layered delegation” in this case is an

“anomaly.” Pet. App. 73a. In exercising discretionary

authority conferred by Congress, agencies routinely take

account of private advice, most notably when promulgating rules after utilizing statutorily prescribed

notice-and-comment procedures. See p. 40, supra.

Congress also has enacted, and the courts of appeals

have upheld, many statutes under which private parties

propose rules that agencies may then approve or reject.

See pp. 39-40 supra. Congress has likewise authorized

advisory committees to propose, and this Court and

lower courts to adopt, the Federal Rules and local rules.

See p. 41, supra.

The court of appeals drew an analogy to this Court’s

holding in Free Enterprise Fund v. PCAOB, 561 U.S.

477 (2010), that Congress may not grant two layers of

tenure protection to certain executive officers. See Pet.

App. 66a. That analogy is inapt. In Free Enterprise

Fund, the Court stated that a “second level of tenure

protection” “transforms” an agency’s independence by

“chang[ing] the nature of the President’s review.” 561

U.S. at 496. “Neither the President, nor anyone directly

responsible to him, nor even an officer whose conduct

he may review only for good cause, ha[d] full control

over the [agency].” Ibid. By contrast, the supposed second level of delegation in this case—the FCC’s reliance

on the Administrator’s non-binding advice—has no such

transformative effect. The Commission still decides,

within the bounds set by Congress, how much carriers

must pay; the Administrator simply provides data to assist the Commission in making that decision.

CONCLUSION

This Court should reverse the judgment of the court

of appeals.

Respectfully submitted.

P. MICHELE ELLISON

General Counsel

JACOB M. LEWIS

Deputy General Counsel

JAMES M. CARR

MATTHEW J. DUNNE

Counsel

Federal Communications

Commission

JANUARY 2025

ELIZABETH B. PRELOGAR

Solicitor General

BRIAN M. BOYNTON

Principal Deputy Assistant

Attorney General

MALCOLM L. STEWART

Deputy Solicitor General

VIVEK SURI

Assistant to the Solicitor

General

MARK B. STERN

GERARD J. SINZDAK

Attorneys

APPENDIX

TABLE OF CONTENTS

Page

Statutory and regulatory provisions:

47 U.S.C. 254 ......................................................................... 1a

47 C.F.R. 54.709 .................................................................. 27a

(I)

APPENDIX

47 U.S.C. 254 provides:

Universal service

(a)

Procedures to review universal service requirements

(1) Federal-State Joint Board on universal service

Within one month after February 8, 1996, the

Commission shall institute and refer to a FederalState Joint Board under section 410(c) of this title a

proceeding to recommend changes to any of its regulations in order to implement sections 214(e) of this

title and this section, including the definition of the

services that are supported by Federal universal service support mechanisms and a specific timetable for

completion of such recommendations. In addition to

the members of the Joint Board required under section

410(c) of this title, one member of such Joint Board

shall be a State-appointed utility consumer advocate

nominated by a national organization of State utility

consumer advocates. The Joint Board shall, after

notice and opportunity for public comment, make its

recommendations to the Commission 9 months after

February 8, 1996.

(2) Commission action

The Commission shall initiate a single proceeding

to implement the recommendations from the Joint

Board required by paragraph (1) and shall complete

such proceeding within 15 months after February 8,

1996. The rules established by such proceeding

shall include a definition of the services that are supported by Federal universal service support mechanisms and a specific timetable for implementation.

Thereafter, the Commission shall complete any pro(1a)

ceeding to implement subsequent recommendations

from any Joint Board on universal service within one

year after receiving such recommendations.

(b)

Universal service principles

The Joint Board and the Commission shall base policies for the preservation and advancement of universal

service on the following principles:

(1) Quality and rates

Quality services should be available at just, reasonable, and affordable rates.

(2) Access to advanced services

Access to advanced telecommunications and information services should be provided in all regions of

the Nation.

(3) Access in rural and high cost areas

Consumers in all regions of the Nation, including

low-income consumers and those in rural, insular,

and high cost areas, should have access to telecommunications and information services, including

interexchange services and advanced telecommunications and information services, that are reasonably

comparable to those services provided in urban areas

and that are available at rates that are reasonably

comparable to rates charged for similar services in

urban areas.

(4) Equitable and nondiscriminatory contributions

All providers of telecommunications services should

make an equitable and nondiscriminatory contribution to the preservation and advancement of universal service.

(5) Specific and predictable support mechanisms

There should be specific, predictable and sufficient Federal and State mechanisms to preserve and

advance universal service.

(6) Access to advanced telecommunications services

for schools, health care, and libraries

Elementary and secondary schools and classrooms, health care providers, and libraries should

have access to advanced telecommunications services

as described in subsection (h).

(7) Additional principles

Such other principles as the Joint Board and the

Commission determine are necessary and appropriate for the protection of the public interest, convenience, and necessity and are consistent with this

chapter.

(c)

Definition

(1) In general

Universal service is an evolving level of telecommunications services that the Commission shall establish periodically under this section, taking into account advances in telecommunications and information technologies and services. The Joint Board

in recommending, and the Commission in establishing, the definition of the services that are supported

by Federal universal service support mechanisms

shall consider the extent to which such telecommunications services—

(A) are essential to education, public health,

or public safety;

(B) have, through the operation of market

choices by customers, been subscribed to by a substantial majority of residential customers;

(D) are consistent with the public interest,

convenience, and necessity.

(2) Alterations and modifications

The Joint Board may, from time to time, recommend to the Commission modifications in the definition of the services that are supported by Federal

universal service support mechanisms.

(3) Special services

In addition to the services included in the definition of universal service under paragraph (1), the

Commission may designate additional services for

such support mechanisms for schools, libraries, and

health care providers for the purposes of subsection

(h).

(d)

Telecommunications carrier contribution

Every telecommunications carrier that provides interstate telecommunications services shall contribute,

on an equitable and nondiscriminatory basis, to the specific, predictable, and sufficient mechanisms established

by the Commission to preserve and advance universal

service. The Commission may exempt a carrier or

class of carriers from this requirement if the carrier’s

telecommunications activities are limited to such an extent that the level of such carrier’s contribution to the

preservation and advancement of universal service

would be de minimis. Any other provider of interstate

telecommunications may be required to contribute to

the preservation and advancement of universal service

if the public interest so requires.

(e)

Universal service support

After the date on which Commission regulations implementing this section take effect, only an eligible telecommunications carrier designated under section 214(e)

of this title shall be eligible to receive specific Federal

universal service support. A carrier that receives such

support shall use that support only for the provision,

maintenance, and upgrading of facilities and services for

which the support is intended.

Any such support

should be explicit and sufficient to achieve the purposes

of this section.

(f )

State authority

A State may adopt regulations not inconsistent with

the Commission’s rules to preserve and advance universal service. Every telecommunications carrier that

provides intrastate telecommunications services shall

contribute, on an equitable and nondiscriminatory basis,

in a manner determined by the State to the preservation

and advancement of universal service in that State. A

State may adopt regulations to provide for additional

definitions and standards to preserve and advance universal service within that State only to the extent that

such regulations adopt additional specific, predictable,

and sufficient mechanisms to support such definitions or

standards that do not rely on or burden Federal universal service support mechanisms.

(g)

Interexchange and interstate services

Within 6 months after February 8, 1996, the Commission shall adopt rules to require that the rates charged

by providers of interexchange telecommunications services to subscribers in rural and high cost areas shall be

no higher than the rates charged by each such provider

to its subscribers in urban areas. Such rules shall also

require that a provider of interstate interexchange telecommunications services shall provide such services to

its subscribers in each State at rates no higher than the

rates charged to its subscribers in any other State.

(h)

Telecommunications services for certain providers

(1) In general

(A)

Health care providers for rural areas

A telecommunications carrier shall, upon receiving a bona fide request, provide telecommunications services which are necessary for the provision of health care services in a State, including

instruction relating to such services, to any public

or nonprofit health care provider that serves persons who reside in rural areas in that State at

rates that are reasonably comparable to rates

charged for similar services in urban areas in that

State. A telecommunications carrier providing

service under this paragraph shall be entitled to

have an amount equal to the difference, if any, between the rates for services provided to health

care providers for rural areas in a State and the

rates for similar services provided to other customers in comparable rural areas in that State

treated as a service obligation as a part of its obli-

gation to participate in the mechanisms to preserve and advance universal service.

(B)

Educational providers and libraries

All telecommunications carriers serving a geographic area shall, upon a bona fide request for

any of its services that are within the definition of

universal service under subsection (c)(3), provide

such services to elementary schools, secondary

schools, and libraries for educational purposes at

rates less than the amounts charged for similar

services to other parties. The discount shall be

an amount that the Commission, with respect to

interstate services, and the States, with respect to

intrastate services, determine is appropriate and

necessary to ensure affordable access to and use

of such services by such entities. A telecommunications carrier providing service under this paragraph shall—

(i) have an amount equal to the amount of

the discount treated as an offset to its obligation to contribute to the mechanisms to preserve and advance universal service, or

(ii) notwithstanding the provisions of subsection (e) of this section, receive reimbursement utilizing the support mechanisms to preserve and advance universal service.

(2) Advanced services

The Commission shall establish competitively

neutral rules—

(A) to enhance, to the extent technically feasible and economically reasonable, access to ad-

vanced telecommunications and information services for all public and nonprofit elementary and

secondary school classrooms, health care providers, and libraries; and

(B) to define the circumstances under which

a telecommunications carrier may be required to

connect its network to such public institutional telecommunications users.

(3) Terms and conditions

Telecommunications services and network capacity provided to a public institutional telecommunications user under this subsection may not be sold, resold, or otherwise transferred by such user in consideration for money or any other thing of value.

(4) Eligibility of users

No entity listed in this subsection shall be entitled

to preferential rates or treatment as required by this

subsection, if such entity operates as a for-profit

business, is a school described in paragraph (7)(A)

with an endowment of more than $50,000,000, or is a

library or library consortium not eligible for assistance from a State library administrative agency under the Library Services and Technology Act [20

U.S.C. 9121 et seq.].

(5) Requirements for certain schools with computers

having Internet access

(A)

(i)

Internet safety

In general

Except as provided in clause (ii), an elementary or secondary school having computers

with Internet access may not receive services

at discount rates under paragraph (1)(B) unless

the school, school board, local educational

agency, or other authority with responsibility

for administration of the school—

(I)

submits to the Commission the certifications described in subparagraphs (B)

and (C);

(II) submits to the Commission a certification that an Internet safety policy has

been adopted and implemented for the

school under subsection (l); and

(III) ensures the use of such computers

in accordance with the certifications.

(ii)

Applicability

The prohibition in clause (i) shall not apply

with respect to a school that receives services

at discount rates under paragraph (1)(B) only

for purposes other than the provision of Internet access, Internet service, or internal connections.

(iii)

Public notice; hearing

An elementary or secondary school described in clause (i), or the school board, local

educational agency, or other authority with responsibility for administration of the school,

shall provide reasonable public notice and hold

at least one public hearing or meeting to address the proposed Internet safety policy. In

the case of an elementary or secondary school

other than an elementary school or a secondary

10a

school as defined in section 7801 of title 20, the

notice and hearing required by this clause may

be limited to those members of the public with

a relationship to the school.

(B)

Certification with respect to minors

A certification under this subparagraph is a

certification that the school, school board, local educational agency, or other authority with responsibility for administration of the school—

(i) is enforcing a policy of Internet safety

for minors that includes monitoring the online

activities of minors and the operation of a technology protection measure with respect to any

of its computers with Internet access that protects against access through such computers to

visual depictions that are—

(I)

obscene;

(II)

child pornography; or

(III) harmful to minors;

(ii) is enforcing the operation of such technology protection measure during any use of

such computers by minors; and

(iii) as part of its Internet safety policy is

educating minors about appropriate online behavior, including interacting with other individuals on social networking websites and in chat

rooms and cyberbullying awareness and response.

11a

(C)

Certification with respect to adults

A certification under this paragraph is a certification that the school, school board, local educational agency, or other authority with responsibility for administration of the school—

(i) is enforcing a policy of Internet safety

that includes the operation of a technology protection measure with respect to any of its computers with Internet access that protects

against access through such computers to visual depictions that are—

(I)

obscene; or

(II)

child pornography; and

(ii) is enforcing the operation of such technology protection measure during any use of

such computers.

(D)

Disabling during adult use

An administrator, supervisor, or other person

authorized by the certifying authority under subparagraph (A)(i) may disable the technology protection measure concerned, during use by an

adult, to enable access for bona fide research or

other lawful purpose.

(E)

(i)

Timing of implementation

In general

Subject to clause (ii) in the case of any school

covered by this paragraph as of the effective

date of this paragraph under section 1721(h) of

the Children’s Internet Protection Act, the cer-

12a

tification under subparagraphs (B) and (C)

shall be made—

(I)

with respect to the first program

funding year under this subsection following

such effective date, not later than 120 days

after the beginning of such program funding

year; and

(II) with respect to any subsequent

program funding year, as part of the application process for such program funding

year.

(ii)

(I)

Process

Schools with Internet safety policy and

technology protection measures in place

A school covered by clause (i) that has in

place an Internet safety policy and technology protection measures meeting the requirements necessary for certification under subparagraphs (B) and (C) shall certify

its compliance with subparagraphs (B) and

cycle under this subsection, except that with

respect to the first program funding year after the effective date of this paragraph under section 1721(h) of the Children’s Internet Protection Act, the certifications shall

be made not later than 120 days after the beginning of such first program funding year.

13a

(II) Schools without Internet safety policy

and technology protection measures in

place

A school covered by clause (i) that does

not have in place an Internet safety policy

and technology protection measures meeting the requirements necessary for certification under subparagraphs (B) and (C)—

(aa) for the first program year after

the effective date of this subsection in

which it is applying for funds under this

subsection, shall certify that it is undertaking such actions, including any necessary procurement procedures, to put in

place an Internet safety policy and technology protection measures meeting the

requirements necessary for certification

under subparagraphs (B) and (C); and

(bb) for the second program year after the effective date of this subsection in

which it is applying for funds under this

subsection, shall certify that it is in compliance with subparagraphs (B) and (C).

Any school that is unable to certify compliance with such requirements in such second

program year shall be ineligible for services

at discount rates or funding in lieu of services at such rates under this subsection for

such second year and all subsequent program years under this subsection, until such

time as such school comes into compliance

with this paragraph.

14a

(III) Waivers

Any school subject to subclause (II) that

cannot come into compliance with subparagraphs (B) and (C) in such second year program may seek a waiver of subclause

(II)(bb) if State or local procurement rules

or regulations or competitive bidding requirements prevent the making of the certification otherwise required by such subclause. A school, school board, local educational agency, or other authority with responsibility for administration of the school

shall notify the Commission of the applicability of such subclause to the school. Such

notice shall certify that the school in question will be brought into compliance before

the start of the third program year after the

effective date of this subsection in which the

school is applying for funds under this subsection.

(F)

Noncompliance

(i)

Failure to submit certification

Any school that knowingly fails to comply

with the application guidelines regarding the

annual submission of certification required by

this paragraph shall not be eligible for services

at discount rates or funding in lieu of services

at such rates under this subsection.

(ii)

Failure to comply with certification

Any school that knowingly fails to ensure

the use of its computers in accordance with a

certification under subparagraphs (B) and (C)

15a

shall reimburse any funds and discounts received under this subsection for the period covered by such certification.

(iii)

(I)

Remedy of noncompliance

Failure to submit

A school that has failed to submit a certification under clause (i) may remedy the

failure by submitting the certification to

which the failure relates. Upon submittal

of such certification, the school shall be eligible for services at discount rates under

this subsection.

(II) Failure to comply

A school that has failed to comply with a

certification as described in clause (ii) may

remedy the failure by ensuring the use of its

computers in accordance with such certification. Upon submittal to the Commission of

a certification or other appropriate evidence

of such remedy, the school shall be eligible

for services at discount rates under this subsection.

(6) Requirements for certain libraries with computers having Internet access

(A)

(i)

Internet safety

In general

Except as provided in clause (ii), a library

having one or more computers with Internet

access may not receive services at discount rates

under paragraph (1)(B) unless the library—

16a

(I)

submits to the Commission the certifications described in subparagraphs (B)

and (C); and

(II) submits to the Commission a certification that an Internet safety policy has

been adopted and implemented for the library under subsection (l); and

(III) ensures the use of such computers

in accordance with the certifications.

(ii)

Applicability

The prohibition in clause (i) shall not apply

with respect to a library that receives services

at discount rates under paragraph (1)(B) only

for purposes other than the provision of Internet access, Internet service, or internal connections.

(iii)

Public notice; hearing

A library described in clause (i) shall provide reasonable public notice and hold at least

one public hearing or meeting to address the

proposed Internet safety policy.

(B)

Certification with respect to minors

A certification under this subparagraph is a

certification that the library—

(i) is enforcing a policy of Internet safety

that includes the operation of a technology protection measure with respect to any of its computers with Internet access that protects against

access through such computers to visual depictions that are—

17a

(I)

obscene;

(II)

child pornography; or

(III) harmful to minors; and

(ii) is enforcing the operation of such technology protection measure during any use of

such computers by minors.

(C)

Certification with respect to adults

A certification under this paragraph is a certification that the library—

(i) is enforcing a policy of Internet safety

that includes the operation of a technology protection measure with respect to any of its computers with Internet access that protects against

access through such computers to visual depictions that are—

(I)

obscene; or

(II)

child pornography; and

(ii) is enforcing the operation of such technology protection measure during any use of

such computers.

(D)

Disabling during adult use

An administrator, supervisor, or other person

authorized by the certifying authority under subparagraph (A)(i) may disable the technology protection measure concerned, during use by an

adult, to enable access for bona fide research or

other lawful purpose.

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(E)

Timing of implementation

(i)

In general

Subject to clause (ii) in the case of any library covered by this paragraph as of the effective date of this paragraph under section

1721(h) of the Children’s Internet Protection

Act, the certification under subparagraphs (B)

and (C) shall be made—

(I)

with respect to the first program

funding year under this subsection following

such effective date, not later than 120 days

after the beginning of such program funding

year; and

(II) with respect to any subsequent

program funding year, as part of the application process for such program funding

year.

(ii)

(I)

Process

Libraries with Internet safety policy

and technology protection measures in

place

A library covered by clause (i) that has in

place an Internet safety policy and technology protection measures meeting the requirements necessary for certification under subparagraphs (B) and (C) shall certify

its compliance with subparagraphs (B) and

cycle under this subsection, except that with

respect to the first program funding year after the effective date of this paragraph un-

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der section 1721(h) of the Children’s Internet Protection Act, the certifications shall

be made not later than 120 days after the beginning of such first program funding year.

(II) Libraries without Internet safety policy

and technology protection measures in

place

A library covered by clause (i) that does

not have in place an Internet safety policy

and technology protection measures meeting the requirements necessary for certification under subparagraphs (B) and (C)—

(aa) for the first program year after

the effective date of this subsection in

which it is applying for funds under this

subsection, shall certify that it is undertaking such actions, including any necessary procurement procedures, to put in

place an Internet safety policy and technology protection measures meeting the

requirements necessary for certification

under subparagraphs (B) and (C); and

(bb) for the second program year after the effective date of this subsection in

which it is applying for funds under this

subsection, shall certify that it is in compliance with subparagraphs (B) and (C).

Any library that is unable to certify compliance with such requirements in such second

program year shall be ineligible for services

at discount rates or funding in lieu of services at such rates under this subsection for

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such second year and all subsequent program years under this subsection, until such

time as such library comes into compliance

with this paragraph.

(III) Waivers

Any library subject to subclause (II) that

cannot come into compliance with subparagraphs (B) and (C) in such second year may

seek a waiver of subclause (II)(bb) if State

or local procurement rules or regulations or

competitive bidding requirements prevent

the making of the certification otherwise required by such subclause. A library, library board, or other authority with responsibility for administration of the library

shall notify the Commission of the applicability of such subclause to the library.

Such notice shall certify that the library in

question will be brought into compliance before the start of the third program year after the effective date of this subsection in

which the library is applying for funds under

this subsection.

(F)

(i)

Noncompliance

Failure to submit certification

Any library that knowingly fails to comply

with the application guidelines regarding the

annual submission of certification required by

this paragraph shall not be eligible for services

at discount rates or funding in lieu of services

at such rates under this subsection.

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(ii)

Failure to comply with certification

Any library that knowingly fails to ensure

the use of its computers in accordance with a

certification under subparagraphs (B) and (C)

shall reimburse all funds and discounts received under this subsection for the period covered by such certification.

(iii)

(I)

Remedy of noncompliance

Failure to submit

A library that has failed to submit a certification under clause (i) may remedy the

failure by submitting the certification to

which the failure relates. Upon submittal

of such certification, the library shall be eligible for services at discount rates under

this subsection.

(II) Failure to comply

A library that has failed to comply with a

certification as described in clause (ii) may

remedy the failure by ensuring the use of its

computers in accordance with such certification. Upon submittal to the Commission of

a certification or other appropriate evidence

of such remedy, the library shall be eligible

for services at discount rates under this subsection.

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(7) Definitions

For purposes of this subsection:

(A)

Elementary and secondary schools

The term “elementary and secondary schools”

means elementary schools and secondary schools,

as defined in section 7801 of title 20.

(B)

Health care provider

The term “health care provider” means—

(i) post-secondary educational institutions

offering health care instruction, teaching hospitals, and medical schools;

(ii) community health centers or health

centers providing health care to migrants;

(iii) local health departments or agencies;

(iv) community mental health centers;

(v)

not-for-profit hospitals;

(vi) rural health clinics;

(vii) skilled nursing facilities (as defined in

section 395i–3(a) of title 42); and

(viii) consortia of health care providers consisting of one or more entities described in

clauses (i) through (vii).

(C)

Public

user

institutional

telecommunications

The term “public institutional telecommunications user” means an elementary or secondary

school, a library, or a health care provider as those

terms are defined in this paragraph.

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(D)

Minor

The term “minor” means any individual who

has not attained the age of 17 years.

(E)

Obscene

The term “obscene” has the meaning given

such term in section 1460 of title 18.

(F)

Child pornography

The term “child pornography” has the meaning

given such term in section 2256 of title 18.

(G)

Harmful to minors

The term “harmful to minors” means any picture, image, graphic image file, or other visual depiction that—

(i) taken as a whole and with respect to

minors, appeals to a prurient interest in nudity,

sex, or excretion;

(ii) depicts, describes, or represents, in a

patently offensive way with respect to what is

suitable for minors, an actual or simulated sexual act or sexual contact, actual or simulated

normal or perverted sexual acts, or a lewd exhibition of the genitals; and

(iii) taken as a whole, lacks serious literary,

artistic, political, or scientific value as to minors.

(H)

Sexual act; sexual contact

The terms “sexual act” and “sexual contact”

have the meanings given such terms in section

2246 of title 18.

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(I)

Technology protection measure

The term “technology protection measure”

means a specific technology that blocks or filters

Internet access to the material covered by a certification under paragraph (5) or (6) to which such

certification relates.

(i)

Consumer protection

The Commission and the States should ensure that

universal service is available at rates that are just, reasonable, and affordable.

( j)

Lifeline assistance

Nothing in this section shall affect the collection, distribution, or administration of the Lifeline Assistance

Program provided for by the Commission under regulations set forth in section 69.117 of title 47, Code of Federal Regulations, and other related sections of such title.

(k)

Subsidy of competitive services prohibited

A telecommunications carrier may not use services

that are not competitive to subsidize services that are

subject to competition. The Commission, with respect

to interstate services, and the States, with respect to intrastate services, shall establish any necessary cost allocation rules, accounting safeguards, and guidelines to

ensure that services included in the definition of universal service bear no more than a reasonable share of the

joint and common costs of facilities used to provide those

services.

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(l)

Internet safety policy requirement for schools and

libraries

(1) In general

In carrying out its responsibilities under subsection (h), each school or library to which subsection (h)

applies shall—

(A) adopt and implement an Internet safety

policy that addresses—

(i) access by minors to inappropriate matter on the Internet and World Wide Web;

(ii) the safety and security of minors when

using electronic mail, chat rooms, and other

forms of direct electronic communications;

(iii) unauthorized access, including socalled “hacking”, and other unlawful activities

by minors online;

(iv) unauthorized disclosure, use, and dissemination of personal identification information regarding minors; and

(v) measures designed to restrict minors’

access to materials harmful to minors; and

(B) provide reasonable public notice and hold

at least one public hearing or meeting to address

the proposed Internet safety policy.

(2) Local determination of content

A determination regarding what matter is inappropriate for minors shall be made by the school

board, local educational agency, library, or other authority responsible for making the determination.

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No agency or instrumentality of the United States

Government may—

(A) establish criteria for making such determination;

(B) review the determination made by the

certifying school, school board, local educational

agency, library, or other authority; or

certifying school, school board, local educational

agency, library, or other authority in the administration of subsection (h)(1)(B).

(3) Availability for review

Each Internet safety policy adopted under this

subsection shall be made available to the Commission, upon request of the Commission, by the school,

school board, local educational agency, library, or

other authority responsible for adopting such Internet safety policy for purposes of the review of such

Internet safety policy by the Commission.

(4) Effective date

This subsection shall apply with respect to schools

and libraries on or after the date that is 120 days after December 21, 2000.

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47 C.F.R. 54.709 provides:

Computations of required contributions to universal service support mechanisms.

(a) Prior to April 1, 2003, contributions to the universal service support mechanisms shall be based on

contributors’ end-user telecommunications revenues

and on a contribution factor determined quarterly by

the Commission. Contributions to the mechanisms beginning April 1, 2003 shall be based on contributors’ projected collected end-user telecommunications revenues,

and on a contribution factor determined quarterly by

the Commission.

(1) For funding the federal universal service support mechanisms prior to April 1, 2003, the subject revenues will be contributors’ interstate and international

revenues derived from domestic end users for telecommunications or telecommunications services, net of prior

period actual contributions. Beginning April 1, 2003,

the subject revenues will be contributors’ projected collected interstate and international revenues derived

from domestic end users for telecommunications or telecommunications services, net of projected contributions.

(2) Prior to April 1, 2003, the quarterly universal

service contribution factor shall be determined by the

Commission based on the ratio of total projected quarterly expenses of the universal service support mechanisms to the total end-user interstate and international

telecommunications revenues, net of prior period actual

contributions. Beginning April 1, 2003, the quarterly

universal service contribution factor shall be determined by the Commission based on the ratio of total pro-

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jected quarterly expenses of the universal service support mechanisms to the total projected collected enduser interstate and international telecommunications

revenues, net of projected contributions. The Commission shall approve the Administrator’s quarterly

projected costs of the universal service support mechanisms, taking into account demand for support and administrative expenses.

The total subject revenues

shall be compiled by the Administrator based on information contained in the Telecommunications Reporting

Worksheets described in § 54.711(a).

(3) Total projected expenses for the federal universal service support mechanisms for each quarter must

be approved by the Commission before they are used to

calculate the quarterly contribution factor and individual contributions. For each quarter, the Administrator

must submit its projections of demand for the federal

universal service support mechanisms for high-cost areas, low-income consumers, schools and libraries, and

rural health care providers, respectively, and the basis

for those projections, to the Commission and the Office

of the Managing Director at least sixty (60) calendar

days prior to the start of that quarter. For each quarter, the Administrator must submit its projections of administrative expenses for the high-cost mechanism, the

low-income mechanism, the schools and libraries mechanism and the rural health care mechanism and the basis for those projections to the Commission and the Office of the Managing Director at least sixty (60) calendar

days prior to the start of that quarter. Based on data

submitted to the Administrator on the Telecommunications Reporting Worksheets, the Administrator must

submit the total contribution base to the Office of the

Managing Director at least thirty (30) days before the

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start of each quarter. The projections of demand and

administrative expenses and the contribution factor

shall be announced by the Commission in a public notice

and shall be made available on the Commission’s website. The Commission reserves the right to set projections of demand and administrative expenses at amounts

that the Commission determines will serve the public interest at any time within the fourteen-day period following release of the Commission’s public notice. If the

Commission take no action within fourteen (14) days of

the date of release of the public notice announcing the

projections of demand and administrative expenses, the

projections of demand and administrative expenses, and

the contribution factor shall be deemed approved by the

Commission. Except as provided in § 54.706(c), the

Administrator shall apply the quarterly contribution

factor, once approved by the Commission, to contributor’s interstate and international end-user telecommunications revenues to calculate the amount of individual

contributions.

(b) If the contributions received by the Administrator in a quarter exceed the amount of universal service

support program contributions and administrative costs

for that quarter, the excess payments will be carried forward to the following quarter. The contribution factors for the following quarter will take into consideration the projected costs of the support mechanisms for

that quarter and the excess contributions carried over

from the previous quarter. The Commission may instruct the Administrator to treat excess contributions in

a manner other than as prescribed in this paragraph (b).

Such instructions may be made in the form of a Commission Order or a public notice released by the Wireline

Competition Bureau. Any such public notice will be-

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come effective fourteen days after release of the public

notice, absent further Commission action.

universal service support program payments and administrative costs for that quarter, the Administrator

shall request authority from the Commission to borrow

funds commercially, with such debt secured by future

contributions. Subsequent contribution factors will

take into consideration the projected costs of the support mechanisms and the additional costs associated

with borrowing funds.

(d) If a contributor fails to file a Telecommunications Reporting Worksheet by the date on which it is

due, the Administrator shall bill that contributor based

on whatever relevant data the Administrator has available, including, but not limited to, the number of lines

presubscribed to the contributor and data from previous

years, taking into consideration any estimated changes

in such data.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.